Earnings: Q3 EPS of $0.81 vs. estimates of $0.79 and $1.25 for Q3 last year.

Revenue: Down 6.3% to $2.96bn vs. estimates of $3.17bn.

“We’ve made some real changes to our portfolio and business approach, and the positive feedback I’m hearing from our customers tells me we are on the right track,” noted CEO Hugh Grant.

Comment: MON’s (NYSE: MON) Q suffered from an early Spring and a quicker-than-normal planting season that saw increased herbicide supplies and consistently falling prices.  In response, management was forced to cut Roundup weed-killer prices close to those of generic competitors.  This helped push gross margins down to 47% from 58% for Q3 last year.  The company will attempt to shift resources into its genetically modified seed business and away from herbicides, but will still be faced with the task of convincing farmers to buy its more expensive offerings amidst a general decline in commodities prices.

A brief glance at the chart below tells a solemn tale of a once high-flyer, having touched $140 during Summer ’08 only to fall to $45 following Wednesday’s earnings release.  MON still garners price targets in the mid-50′s, which would provide a satisfactory return from current levels, but as long as commodity prices are falling it will be tough for shares to put together any kind of rally.

Disclosure: No holdings in MON.

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