Cargill Earnings Plummet 82 Percent in Fourth Quarter

Cargill Earnings Plummet 82 Percent in Fourth Quarter

CEO Greg Page said that “cyclical trends” in the global soybean processing and North American beef industries led to decreased margins in two of Cargill’s operations.

Cargill, Inc., saw its earnings plummet in the fourth quarter of its last fiscal year, dropping 82 percent compared to the same period the previous year and missing the company’s expectations.

For the fourth quarter, which ended in May, the Wayzata-based agribusiness giant’s earnings totaled $73 million. Revenue, meanwhile, totaled $34 billion during the period, down 2 percent from a year ago.

“[W]e did not trade as well in this year’s markets, which were driven as much by the economic and political environment as by the fundamentals,” Cargill Chairman and CEO Greg Page said in a prepared statement. “Cyclical trends in the global soybean processing and North American beef industries also were in play, decreasing margins in parts of Cargill’s oilseed processing and beef processing operations.”

For the full fiscal year, Cargill reported $1.17 billion in profits, down 56 percent compared to the previous fiscal year. Revenue totaled $133.9 billion, up 12 percent.

During its last fiscal year, Cargill began realigning its cost structure and simplifying its work processes. It cut expenses by more than $400 million, and in December, the company announced plans to lay off up to 2,000 employees—or about 1.5 percent of its global work force—within the first half of 2012.

Page noted that although the company’s earnings performance failed to meet expectations, there were “notable exceptions.” One, he said, was its 26-unit food ingredients group, which delivered a third consecutive year of record earnings. Cargill said there was particularly strong worldwide demand for sweeteners, starches, specialty oils, and cocoa.

Over the last fiscal year, Cargill also invested a record sum—more than $4 billion—in acquisitions, new and expanded facilities, and capital improvements, Page said.

Approximately $2.1 billion of that investment was put toward the acquisition of Provimi, a Netherlands-based animal nutrition company that Cargill bought in November. Other purchases throughout the year included Central American poultry and meat processor Corporación Pipasa and German cocoa and chocolate company KVB.

Cargill is Minnesota's largest company based on revenue.