Cargill Profits Leap 66 Percent In 2017 Q1
Cargill kicked off its fiscal 2017 year with a 66 percent rise in profits during its first quarter, the company said Tuesday.
Renewed consumer demand for beef products helped push the Minnetonka-based food conglomerate’s profits for the June through August period. Cargill’s poultry business and animal feed operations also performed well, while weather-related events hurt its sales volume for aqua feeds.
In total, Cargill reported profits of $852 million in its first quarter compared to $512 million a year ago. Its overall sales fell 1.5 percent year-over-year to $27.1 billion.
After spending the last two years acquiring more profitable meat and ingredient businesses and selling off or shutting down its lower profit operations, Cargill CEO David MacLennan said the company’s restructuring moves are beginning to pay off.
“We’ve been charting a new path to higher performance, and it’s rewarding to see the many changes we’ve made resulting in gains across much of the company,” he said in a statement. He cited the large profit jump to improved optimization of the company’s plants, supply chains and cost structures.
One of Cargill’s more recent acquisitions includes the June purchase of Five Star Custom Foods. In its quarterly release, Cargill said it would use the company’s Texas and Tennessee facilities to escalate its improving cattle business. Cargill has also made investments in the farmed fish market, including the $1.5 billion purchase of Norwegian salmon feed maker EWOS in August 2015.
“These actions are making [Cargill] more competitive,” MacLennan said, while also “equipping [the company] to serve a broadening range of customer needs.”