Cargill Rebounds as Quarterly Earnings Quadruple
Cargill, Inc., on Thursday reported an earnings rebound, with its first-quarter profits more than quadrupling on lower costs and streamlined processes.
The Wayzata-based agribusiness giant said that earnings for the quarter that ended August 31 totaled $975 million—up more than 310 percent from $236 million during the same period a year ago.
Earnings are up even more from Cargill’s prior fiscal quarter, when the company reported $73 million in profits—the lowest quarterly earnings for the company since 1991, according to a report by Reuters.
Revenue, meanwhile, totaled $33.8 billion during the most recent quarter, down about 2 percent from $34.6 billion during the first quarter of last year.
Cargill said that earnings improved across all five of its business segments. Last year’s first-quarter results were dragged down by higher livestock and feeding costs and uncertainty regarding the economy and financial markets.
“During the past two years, Cargill has invested $8.1 billion to better serve our customers all around the world,” Chairman and CEO Greg Page said in a statement. “By investing steadily, we’ve been able to significantly boost the breadth and depth of the products and services we offer our customers. And that has strengthened the balance, diversification, and resilience we strive for in our business.”
Cargill said that the impact of the U.S. drought “has been mixed and will continue to be so in the months ahead.” The weather has affected raw material distribution, causing more international buyers to buy from non-U.S. sources, the company said.
“Cargill’s North American grain-handling volumes for exports are anticipated to be lower than pre-drought expectations, and it may be a challenging year for the company’s animal protein businesses globally,” the company added.
The company said that its most recent quarter benefitted from cost-cutting, streamlined processes, and efforts to “ensure capital expenditures were being directed to where they mattered most to customers.” In December 2011, the company announced plans to lay off up to 2,000 employees—or 1.5 percent of its work force—over the course of six months.
“Now more than ever Cargill is using our knowledge and market insight to help customers manage in this time of tighter supplies, higher prices, and more volatile markets,” Page said. “We are reaching out to customers and tapping the full resources of Cargill to create solutions that address their needs.”
Cargill employs 142,000 people in 65 countries. It is Minnesota’s largest private company based on revenue, which totaled $1.17 billion in its most recent fiscal year.