Earnings rise 41% as Cargill meets corn, soybean demand

by Jeff Gelski
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MINNEAPOLIS — Cargill achieved net earnings of $784 million in the fiscal 2015 second quarter ended Nov. 30, which was up 41% from $556 million in the previous fiscal year’s second quarter. Revenues dipped 8% to $30.3 billion.

Two segments, Origination & Processing and Animal Nutrition & Protein, posted significant increases in second-quarter earnings. Earnings in Food Ingredients & Applications decreased, but excluding a charge related to the announced closing of a corn mill in Memphis, segment earnings were up moderately. Results were mixed in Industrial & Financial Services.

“With first-rate performance in our agricultural, animal nutrition and meat businesses, Cargill posted strong results, outpacing recent quarters by a good margin,” said David MacLennan, president and chief executive officer of Minneapolis-based Cargill, when results were given Jan. 8. “Just as last quarter’s focus was on getting ready for North America’s big harvest, the current quarter was all about execution. Our team did an excellent job serving farmer customers and fully utilizing our supply chains to meet domestic and export demand.”

In Origination & Processing, record corn and soybean harvests in the United States combined with domestic and export demand to boost soybean origination, crush volumes, and bean and meal exports. In Animal Nutrition & Protein, Australian beef processing as well as U.S. cattle feeding and pork processing led results. The U.S. turkey business had one of its best holiday seasons.

In Food Ingredients & Applications, earnings softened in global cocoa and chocolate, and results declined in some regions for refined edible oils. In North America, operating performance improved in ethanol production, flour milling, and salt and deicing products. Operating performance also improved in texturizing ingredients and in staple foods in Brazil.

Total results in Industrial & Financial Service were down from the previous year’s second quarter. Energy earnings rose thanks to effective risk management in global oil markets. Ocean transportation and metals trading results strengthened in the second quarter, but results were below those in the previous year’s second quarter.

In the first half of the fiscal year, Cargill’s earnings companywide were $1.21 billion, up 7% from $1.13 billion in the same time period of the previous year.

Cargill is kicking off its 150th anniversary celebration this month and on Jan. 12 will debut an anniversary web site at www.cargill.com/150.

“We’re pleased to kick off Cargill’s 150th year in business with these positive results,” Mr. MacLennan said. “We look forward to many more years of serving the changing needs of our customers and stakeholders.”
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