Monsanto Co., the world’s largest seed company, posted worse-than-expected fiscal third quarter earnings amid continued pressure from weak global agricultural markets. The company also said it’s been in discussions “with others” seeking alternatives to a proposed bid from Bayer AG.

Net income was $717 million, or $1.63 a share, in the three months ended May 31, compared with $1.14 billion, or $2.39, a year earlier, St. Louis-based Monsanto said in a statement Wednesday. Profit excluding one-time items was $2.17 a share. That’s lower than the $2.42 average of 17 analysts’ estimates compiled by Bloomberg. Sales fell to $4.19 billion from $4.58 billion a year earlier, trailing the $4.49 billion average estimate.

“Our industry is running at a low point in the overall agriculture cycle and we’ve experienced an unforeseen level of challenges affecting our business in fiscal year 2016,” Hugh Grant, chairman and chief executive officer, said in the statement.

The worse-than-expected results undercut the company’s argument that Bayer’s proposed $53.7 billion bid is less than adequate. Monsanto has been facing aggressive cutting of seed prices by competitors and falling prices for the herbicide glyphosate amid overproduction by Chinese generic producers.

‘Alternative’ Options

“While there is no formal update on the Bayer proposal, I have been personally in discussions with Bayer’s management over the last several weeks, along with others regarding alternative strategic options,” Grant said. “We remain open and will continue to actively engage in constructive dialogue to pursue value enhancing strategic options.”

Bayer made an offer in May to acquire Monsanto for a $122-a-share, all-cash offer, which the company rejected as too low. Discussions between Bayer and Monsanto are at an impasse at the moment, with the German company seeking to do due diligence on Monsanto’s book, while Monsanto is holding out for a higher bid first, people familiar with the matter said earlier this month.

The bid adds to the wave of consolidation in the agricultural chemicals sector. Aside from Bayer’s bid for Monsanto, China National Chemical Corp. said in February that it reached a deal to buy Syngenta AG, and Dow Chemical Co. and DuPont Co. announced in December they would merge before breaking into three separate entities.

Monsanto was little changed at $101 at 8:17 a.m. before the start of regular trading in New York.

To contact the reporter on this story: Lydia Mulvany in Chicago at [email protected]

To contact the editors responsible for this story: Simon Casey at [email protected]

Millie Munshi, Robin Saponar

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