Monsanto fiscal 3Q profit slips 3 percent

Monsanto's fiscal third quarter net income slipped 3 percent, as hits to the agricultural product company's cotton and soybean seed segments weighed on revenue growth.

The St. Louis company said Wednesday that its revenue for the latest quarter inched up less than 1 percent as Monsanto booked a smaller contribution from its Brazilian soybean business and saw a drop in overall planted cotton acres. The seed giant also said higher production costs resulting from last year's drought affected its results.

In contrast, Monsanto's revenue had soared 17 percent a year earlier as a mild spring helped spur farmers to sow crops earlier and in larger numbers.

The company earned $909 million, or $1.68 per share, in the quarter ended May 31, down from $937 million, or $1.74 per share, a year ago. Revenue inched up less than 1 percent to $4.25 billion.

Monsanto earned $1.66 per share, not counting a tax matter resolution.

Analysts expected earnings of $1.61 per share on $4.41 billion in revenue, according to FactSet.

Shares of Monsanto fell 80 cents to $100.60 in late morning trading Wednesday, while broader trading indexes climbed less than 1 percent. Its shares had peaked for the past year at $109.33 in mid-May. They are up from a low of $78.75 almost a year ago.

Monsanto Co. makes seeds for crops like corn, soybean, cotton and wheat and crop protection chemicals like the herbicide Roundup. The agricultural giant produces genetically engineered seeds used by farmers for their pest resistance and ability to produce bigger crops.

Corn, which is used for food, fuel, animal feed and soda syrup, is by far Monsanto's largest unit.

Genetically enhanced crops are grown on more than 420 million acres in nearly 30 countries by over 17 million farmers worldwide, the World Food Prize Foundation has said. Many U.S. farmers credited genetic modifications in corn with saving last year's crop from all but total devastation as half of the nation endured the worst drought in 60 years.

But these crops also have drawn criticism from organic food advocates who say they are harmful to people and the environment. Last month, protesters organized "March Against Monsanto" rallies in several countries over genetically modified food.

Monsanto has maintained that its seeds improve agriculture by helping farmers produce more from their land while conserving resources such as water and energy.

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UK Treasury makes new cuts despite weak economy

LONDON — Britain's Treasury chief announced 11.5 billion pounds ($17.7 billion) in spending cuts Wednesday, including benefit cuts for some retirees and more job losses for state workers, in an attempt to make ends meet.

George Osborne outlined a bleak program for national spending, with cuts in many departments, though defense was spared the axe.

"Britain is moving out from intensive care and from rescue to recovery," Osborne declared.

He cited challenges "from abroad" such as the financial crisis in the 17-country eurozone and higher oil prices as part of the reason "this country has to continue to make savings."

Osborne had hoped that Britain could move past austerity programs by the time he released the national spending review, which sets out state spending limits for 2015-2016. In his last review, in 2010, he laid out plans to eliminate the deficit by 2015 — in time for the next election.

But the deficit has remained stubbornly high, in part because economic growth is anemic. The budget deficit was 6.3 percent of annual GDP in 2012, according to figures from the Eurostat statistics agency. That was an improvement from 2011's 7.8 percent but is still more than twice the EU limit of 3 percent and at the same level as that of Cyprus, which needed a financial rescue.

Opposition leaders immediately attacked the government's plan, arguing that Britain would not be able to revive its moribund economy with more spending cuts.

The Labour Party spokesman on economic issues, Ed Balls, noted that Moody's Investors Service this year stripped the country of its top AAA credit rating because of the government's financial troubles.

Adding a personal dig, Balls reminded Osborne that President Barack Obama accidentally got the U.K. Treasury chief's first name wrong during the recent G-8 summit, calling him Jeffrey rather than George.

"Failed tests, broken promises — your friends call you George, the president calls you Jeffrey but to everyone else you are just Bungle," Balls said, referring to a clumsy British children's television character.

Some departments, such as that dealing with local communities and justice, received cuts of 10 percent. Cuts are coming in arts, sports, and other community programs while changes were broadly outlined to keep welfare spending from getting out of control.

The Treasury chief also said welfare program would face a cap starting in April 2015, but that pensions would not be affected.

Public sector employment was forecast to continue to fall. Osborne said that half a million posts had already been trimmed in the public sector since the last spending round in 2010, with another 144,000 forecast to go by 2015. There are some 5.2 million government jobs in Britain.

"We're saving 2 billion pounds a year, with a civil service now smaller than at any time since the war," Osborne said.

Defense fared better than many departments. The massive defense budget remained steady at 24 billion pounds. Police counter-terror programs were also spared, while the intelligence services — MI5, MI6 and GCHQ — received a 3.4 percent increase in their annual budget.

Economists at the Institute of Fiscal Studies suggest the British government is optimistic in its forecasts and that the country may need until 2020 to get past the age of austerity.

Osborne said borrowing is set to be 108 billion pounds this year.

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IRS official won't testify in contracting probe

WASHINGTON — An Internal Revenue Service official is refusing to testify before a House committee examining his relationship with the CEO of computer services company that has as much as $500 million in contracts with the IRS.

Gregory Roseman said at a committee hearing Wednesday that he was advised by his lawyer to invoke his constitutional right against self-incrimination.

The committee is investigating government contracts secured by Strong Castle Inc., including whether a friendship between Roseman and company CEO Braulio Castillo was a factor in the company's ability to secure such large contracts with the IRS.

Castillo told the committee he doesn't know why Roseman invoked his 5th Amendment right. Castillo says his company has done nothing wrong or illegal.

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IEA: Global renewable energy growing fast

NEW YORK — Renewable energy is growing fast around the world and will be the second biggest source of electricity, after coal, by 2016, according to a five-year outlook published Wednesday by the International Energy Agency.

Developing countries are building more wind, solar and hydro-electric power plants to meet rising power demand and combat local pollution problems. And the costs of renewables are falling below the cost of traditional power sources such as coal, natural gas and oil in some markets with high-priced power.

Renewable power is the fastest-growing power generation sector and it is expected to increase by 40 percent in the next five years. By 2018 it will make up a quarter of the world's energy mix, according to the report up from 20 percent in 2011.

Energy generated with wind, solar, geothermal and energy derived from plants — the non-hydroelectric sources generally favored by environmental groups and sustainability experts — is also expected to grow quickly, but it contributes a far smaller amount of energy to the global mix.

These non-hydro renewables will supply 8 percent of the world's energy by 2018, up from 4 percent in 2011 and 2 percent in 2006.

Still, renewable power is facing uncertain times as subsidies in developed countries wane. Investment in renewable projects fell in 2012, according to the IEA, an energy security and research organization based in Paris that serves 28 oil-importing countries, including the U.S.

In a report published in April, the IEA said the world's energy is no cleaner than it was 20 years ago because of rising reliance on coal-fired generation in China, India, and parts of Europe that are phasing out nuclear power and facing high natural gas prices.

"The rapid growth of renewables continues to beat expectations and is a bright spot in an otherwise bleak assessment of global progress toward a cleaner and more diversified energy mix," the report concludes.

The use of biofuels is expected to grow, though at a slower rate than renewable electricity, in part because companies haven't succeeded in developing technology that can squeeze fuels from plant waste or dedicated biofuel crops such as grasses at commercial scale. The vast majority of biofuel used today is alcohol — called ethanol — made from sugar cane or corn.

Biofuels use is projected to increase 25 percent by 2018 to 2.4 million barrels per day. By comparison, the world consumes 90 million barrels per day of petroleum.

Developing countries, led by China, will account for two-thirds of the global increase in renewable generation. Growth in Europe and the U.S. is expected to slow, though President Barack Obama outlined a sweeping plan Tuesday that would encourage renewed investment in renewable sources.

IEA Executive Director Maria van der Hoeven said in a statement that the biggest impediment to further renewable growth is changing energy policies that increase risk for investors. "Many renewables no longer require high economic incentives. But they do still need long-term policies that provide a predictable and reliable market and regulatory framework compatible with societal goals," she said.

The IEA estimates that worldwide subsides for fossil fuels are six times higher than incentives for renewables.

Follow Jonathan Fahey on Twitter at http://twitter.com/JonathanFahey.

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Watchdog: IRS fought oversight in tea party cases

WASHINGTON — The Internal Revenue Service long has resisted efforts by an internal watchdog to help groups seeking tax-exempt status, creating a culture that enabled agents to improperly target such organizations for additional scrutiny, the National Taxpayer Advocate reported Wednesday.

Nina E. Olson, who runs the independent office within the IRS, said in her annual report to Congress that culture continues today, despite the scandal that has rocked the tax agency for more than a month.

Olson recommended that Congress authorize her to make "apology payments" of up to $1,000 to groups in cases in which "the IRS has caused excessive expense or undue burden to the taxpayer, and the taxpayer has experienced a significant hardship."

She said her office first approached the IRS about a backlog of applications for tax-exempt status in 2007. Olson has the authority to intervene in cases in which IRS actions are causing a "significant hardship" for taxpayers.

But the report said the agency's Exempt Organizations division resisted Olson's efforts, contending that she had no authority to intervene in such cases.

"The attitude that (Exempt Organizations) does not have to be responsive to (the taxpayer advocate) permeated the organization and persists to this day, with one EO employee recently complaining about being 'so tired of you calling,'" the report said.

The IRS has been under siege since the agency revealed last month that agents had improperly targeted tea party and other conservative groups for additional, often burdensome scrutiny when they applied for tax-exempt status during the 2010 and 2012 elections.

This week, the IRS released documents showing that progressive and liberal groups may have been improperly singled out as well.

The taxpayer advocate does not have the authority to investigate the IRS, so the new report doesn't shed any light on who ordered agents to target the groups.

The report does, however, provide more details about an IRS division that shunned outside scrutiny even as agents engaged in conduct that has been condemned by the president, members of Congress and the public.

The IRS' acting commissioner, Danny Werfel, promised to work with Olson's office "to improve education inside and outside the IRS about taxpayer rights."

Werfel, who took over the agency last month, added, "We also agree on other areas, including the need to do a better job of reducing the backlog of (tax-exempt) applications."

The IRS was screening the groups' applications because agents were trying to determine their level of political activity. IRS regulations say tax-exempt social welfare organizations may engage in some political activity but the activity may not be their primary mission.

The additional scrutiny caused hundreds of applications for tax-exempt status to languish for more than a year, with some waiting more than three years for a decision.

The report said IRS agents are supposed to report taxpayer inquiries to the taxpayer advocate's office if a case has been delayed more than 30 days beyond the normal processing time. Despite the directive, the Exempt Organizations division did not refer any cases to the taxpayer advocate, even though nearly 300 applications were delayed much longer than 30 days, the report said.

From 2010 to 2013, the taxpayer advocate's office said it received 19 referrals about cases that may have involved groups that were targeted for additional scrutiny, the report said. Most of the referrals came from congressional offices.

The office didn't recognize a pattern because of the volume of cases it handles. During the same period, the taxpayer advocate's office received a total of 915,000 referrals, according to the report.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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UBS France fined $13MN over control failures

PARIS — UBS France is being fined 10 million euros ($13 million) after French authorities found the bank delayed tightening up controls to curb money laundering and cross-border fiscal fraud.

The French banking regulator, ACP, said Wednesday that UBS France was warned by autumn 2007 about inadequate procedures and did nothing for 18 months. The statement did not specify whether there had been any illicit activity.

French prosecutors are separately investigating UBS France — and three executives — for complicity in illegal business dealings.

In a statement, the Swiss bank said its French subsidiary has been under new leadership since 2012 "and has continuously strengthened its rules and processes."

The bank said it was considering appealing the decision and has denied wrongdoing in the investigation.

The fine on UBS France comes amid heightened efforts by officials to crack down on tax evaders across Europe as the region's governments struggle to cut debt and emerge from economic recession.

The head of Europe's central bank underlined this effort Wednesday, saying after a hearing in the French parliament that there could be "no complacency" for tax cheats.

"I think there should be no doubt that tax evasion should be...a fight that should be fought at all costs and won," ECB President Mario Draghi said.

The European Union is leading a charge to crack down on secret accounts that hide money from governments, and the Group of 20 leading industrial and developing nations has pledged to rein in tax avoidance by multinational companies.

Switzerland's banks, known for their secrecy, have long been suspected of being used to hide money from tax authorities. The Alpine country has been pressured in recent years, however, into negotiating some tax treaties with the U.S., Germany and others.

UBS, in particular, was in the spotlight earlier this year as one of the banks where France's then-budget minister hid funds from tax authorities. Jerome Cahuzac, who stepped down amid the scandal, confessed earlier this year that he hid hundreds of thousands of euros in Swiss and Singaporean banks for decades.

In 2009, UBS paid $780 million to U.S. authorities as part of a deal to end a tax evasion probe in which it stood accused of helping Americans hide billions of dollars in secret accounts.

The bank was also the subject of a book published last year — allegedly based on accounts of disgruntled former employees — that accused the bank of systematically helping French customers dodge taxes. The bank has flatly denied the allegations in the book "Ces 600 milliards qui manquent a la France" — "The 600 billion missing from France."

But the book appears to have sparked — or perhaps spurred on — the investigation in France. The UBS executives were put under formal investigation shortly after it came out last spring.

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Esperion Therapeutics shares jump in trading debut

NEW YORK — Shares of Esperion Therapeutics Inc. jumped Wednesday in their first day of trading after the drug developer raised $70 million in an initial public offering.

In midday trading, the drug developer's shares rose $1.27, or 9 percent, to $15.27, after jumping as high as $17.40 earlier in the session. Earlier, Esperion sold 5 million shares for $14 each, resulting in $70 million in proceeds.

Esperion is developing a new kind of experimental drug that would lower LDL cholesterol, commonly known as "bad" cholesterol. Roger Newton, the company's founder, executive chairman and chief scientific officer, is a co-discoverer of the cholesterol drug Lipitor, the world's top-selling drug for more than a decade.

The shares are trading on the Nasdaq under the ticker symbol "ESPR." The company is based in Plymouth, Mich.

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BofA executive: Small business is on the comeback

NEW YORK — Robb Hilson's job as head of small business banking at Bank of America is to convince small business owners that the bank wants to do business with them.

That's not easy when small businesses have consistently said in surveys that they find it hard to get loans from banks, and when banks have become more cautious about lending to small companies following the recession. But in the 18 months Hilson has been on the job at the nation's second-largest bank it has had some success with its 3.2 million small business customers. Last year, Bank of America made $8.7 billion in new loans to small businesses, up 28 percent from 2011.

"I feel really good about the momentum. There's obviously more work to do, but we've made a lot of progress," Hilson says.

Hilson, 54, took the job as small business executive in November 2011 soon after Bank of America started placing 1,000 bankers in cities and communities around the country to serve small companies. Bank of America and other big banks began bolstering their small business outreach after they were criticized by company owners and lawmakers for stringent lending standards that prevented many companies from getting loans. Bank of America was also one of the banks that pledged to the Small Business Administration that it would increase its loans to small business.

Hilson previously served larger companies during more than two decades at the bank. This job is very different from anything he has done before.

"It's a bigger challenge because we're building a business," Hilson says. "It's a different conversation with small business owners. So many of these folks are wearing a bunch of hats. It's just a different environment than meeting with the CEO."

Hilson's role puts him in a position to hear about, and gain understanding, of the problems small business owners face. He recently spoke with The Associated Press about his work and small businesses. Here are excerpts, edited for brevity and clarity:

Q. How do you size up the state of small business today?

A. This most recent downturn by almost any account, if not all accounts, was the steepest, the most dramatic, severe, however you want to characterize it, since the Great Depression. I think it's also fair to say that small businesses relative to other businesses were particularly hard hit. I think it really speaks to the remarkable resilience of American small business owners that they have come back as far as they have. The economy isn't perfect, but it continues to slowly but surely get better. We saw small business owners doing a great job of rightsizing their businesses when sales dropped off so dramatically in 2008 and 2009, and they've come back. Surveys have told us that despite all the challenges and the recession that they endured, very few of them have second thoughts about getting into business for themselves. They are very confident and optimistic about their own capabilities, less so about things that they don't have as much control over.

Q. What will it take for small business owners to be more confident?

A. You probably see a little more confidence today than what you saw in November or even last May. I think there were things leading up to the election and all that (that contributed to some pessimism).

I think they're dealing with this new reality of sluggish growth, very low interest rates and not taking as much risk as they were in 2005. What is it going to take to go back to 2005? I don't know if we're going to see that, maybe ever. Certainly not in the near term.

I think we'll see more optimism than what we've seen today. In our survey, we did a subset around the millennials (people age 18-34). The numbers were off the chart versus any other age groups we looked at. They were very optimistic, more likely to hire, more optimistic about where the economy is going and prospects for the near term. As that group becomes a bigger part of the small business owner population, maybe you'll see some lift there as well.

Q. Suppose a business owner doesn't qualify for a loan at Bank of America? What do you do?

A. We would give them a pretty good sense of what it would need for them to look like for them to qualify. But we also work with some nonprofit organizations in the community that might be able to work with them. Community development financial institutions — these are by and large nonprofit financial institutions, and we've been one of the biggest supporters of these. They're smaller organizations that aren't subject to the same regulations as Federal Deposit Insurance Corp. banks. We extended a $110 million grant a couple of years ago to some CDFIs that turned around and leveraged that to the tune of more than 10 times. So they were able to leverage that to more than $100 million that they could then invest or lend directly to small businesses.

If we're not able to help a client today from a credit standpoint, our goal would be to give them a pretty good sense of, what were the gaps, and what they would need to work on to make the answer a positive one the next time around.

There are other opportunities for us to help them, not just with credit. There are opportunities for us to help improve their cash flow by helping them collect payments, for instance.

Q. What results are you seeing from the 1,000 bankers you've placed around the country?

A. We have a lot of nice charts with impressive trend lines. Let's talk business lending. I think it's safe to say that small business owners, their health continues to improve, so balance sheets and cash flows are getting stronger, interest rates are at an all-time low. So it's a good environment to borrow in. The economy, while not robust, continues to grow. Translated, that equals greater loan demand, and our bankers have a lot to do with that. We're excited that we were up 28 percent in new loan originations in 2012 over 2011. And through the first four months of this year, we're ahead of that pace. I feel really good about how we're delivering credit. But we know we can do more.

We know that the bankers are focused on credit but they're also focusing on delivering all of our capabilities, not just meeting the needs of the business. They're also working with other experts, pairing up with financial solutions advisers who will work with small businesses on the personal side — investing solutions, preparing small business owners for retirement or for taking care of their children's education.

Q. But small business owners are known for plowing every penny they can into their companies. How do you convince them that their personal finances should be more of a priority?

A. I think part of it is our enlightening small business owners about all that we can do for them. They may just be focused on their business, but we will lead a conversation that will provoke them to think about, are they addressing their kids' college education? Or are they doing some things that would benefit their employees? Are they doing some things that would help them prepare for retirement? Through our Merrill Lynch platform, our financial services associates were able to introduce some expertise that we weren't having before we deployed this model. We're taking a more holistic view, not just the business piece of it, but the personal side as well.

Q. What do you feel have been your biggest accomplishments as head of small business at Bank of America?

A. I feel really good about how we have pulled together this organization. We've got 3.2 million customers that were up, until 18 months ago, embedded in different parts of this company that we call Bank of America. We're more thoughtfully organized around them, from a sales perspective, product standpoint and from a service capability. There's obviously more work to do, but we've made a lot of progress in the 18 months.

A majority of the bankers' time is spent working with existing clients that we haven't had much of a relationship with or we have a relationship and we want to do more with them. While we love new relationships, the biggest and best opportunity for us today is to do more with what we have.

Q. Why are your biggest opportunities with existing customers?

A. Based on what they do with us, we know there's a lot more we could do with them. A number of clients that might consider us to be their lead bank, but it's primarily through basic checking and cash management with us. They don't necessarily have any borrowing with us. They might have a credit card, but they don't have a term loan or a building on their property. Or they might have all of that business with us, but they're not a client of Merrill Lynch. We have a great opportunity on the investing side of the house.

Q. If you were to own a small business, what would it be?

A. I would love to own a little record store. And vinyl is coming back! Vinyl isn't dead and in fact, it's thriving and I would love to do it. But what is more likely to happen at some point is I am going to get into a business with one or both of my children. My son is two years out of college and doing very well in a small business here in Miami. It's a company that's in this growing field called e-discovery, kind of navigating the legalese in this day and age of social media. And my daughter, an aspiring small business owner, is in her first year at the Culinary Institute of America in Napa Valley. She wants to be an executive chef and own her own restaurant someday.

Q. If you did open this record store, what vinyl would you stock it with?

A. You'd have to start with Sinatra and you'd have to capture some of the current genres. But the cool thing about vinyl is, not only are current bands coming out with that format, you've got this huge catalog of artists that been around a long time, where they're reissuing these pressings that sound better than ever.

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CNN bringing 'Crossfire' back on the air

NEW YORK — CNN said Wednesday that it is bringing the political debate show "Crossfire" back on the air this fall with Newt Gingrich as one of the combatants.

The former House speaker and Republican presidential candidate will be one of the four regular hosts of the program, taking the conservative side along with commentator S.E. Cupp of The Blaze. Stephanie Cutter, a former campaign spokeswoman for President Barack Obama, and Van Jones, a Yale-educated attorney and advocate for green projects, will speak from the left.

"It just feels like the right time for 'Crossfire' to be coming back," said Sam Feist, CNN's senior vice president and Washington bureau chief. The show will air weekdays but no time slot has been set.

The original aired on CNN from 1982 until 2005, and its alumni list reads like a Washington who's who — Pat Buchanan, Robert Novak, Geraldine Ferraro, Lynn Cheney, James Carville, Paul Begala and Tucker Carlson among them. It was essentially killed by Jon Stewart.

"The Daily Show" host appeared on "Crossfire" in 2004 and got into a bitter fight with Carlson, with Stewart calling the show "partisan hackery" that did little to advance the cause of democracy. When then-CNN U.S. President Jon Klein cancelled it a few months later, he said he was essentially siding with Stewart.

But with Fox News Channel tilting right and MSNBC leaning left, there really isn't a debate program on cable TV now that is a fair fight, Feist said.

"CNN is really the only network that can have a bipartisan debate show with some level of authenticity," he said.

Each show will have a single topic and feature two of the four regular hosts, joined by two guests who are experts on the particular issue being discussed, Feist said. It will be a studio show without the audience that was used in a later incarnation of "Crossfire," he said.

New CNN chief Jeff Zucker began pushing for the show's resurrection almost since taking over this winter, saying he had long been a fan of it, Feist said.

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Microsoft to unveil latest Windows adjustments

SAN FRANCISCO — Microsoft has released an update to Windows 8, aiming to address some of the gripes people have with the latest version of the company's flagship operating system.

The company made a preview of Windows 8.1 available for free as a download on Wednesday.

At an event Wednesday in San Francisco, Microsoft CEO Steve Ballmer acknowledged that the company pushed hard to get people to adopt a new tile-based user interface. Microsoft is now back-pedaling, making it easier to reach and use the older "desktop" interface.

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