Cargill’s Annual Profits Slide 19%; Revenue Drops Too

Cargill’s Annual Profits Slide 19%; Revenue Drops Too

The largest private company in the country reported a drop in revenue for its most recent fiscal year, the first time its full-year revenue has fallen in four years.

Food and agricultural products giant Cargill announced Thursday that its revenue and earnings dropped during its latest fiscal year, due in part to last year’s U.S. drought and changing economic conditions abroad.

Wayzata-based Cargill, Minnesota’s largest private company and the largest in the country, announced that net earnings for its fourth quarter, which ended May 31, totaled $424 million, down 12 percent from $483 million, during the same period in 2013.

Revenue, meanwhile, totaled $36.2 billion, up 2 percent from $35.4 billion in the fourth quarter of 2013.

For the full fiscal year, Cargill reported profits of $1.87 billion, a 19 percent drop from $2.31 billion in the prior year.

Cargill’s full-year profits have seen their ups and downs over the last few years. In 2012, the company reported $1.17 billion in profits, down 56 percent from its record $2.69 billion in 2011, which was up 35 percent from $1.99 billion in 2010.

Its latest full-year revenue fell 1 percent to $134.9 billion, marking the first year the company has reported a decline in annual revenue since 2010. Cargill’s full-year revenue was up 2 percent last year, up 12 percent in 2012, up 32 percent in 2011, but fell 6 percent in 2010.

Cargill added that its cash flow from operations for fiscal 2014 totaled $3.77 billion, down 12 percent from $4.27 billion in the prior year.

“Though we look back on a year in which overall earnings fell short of expectations, we realized stronger operating results in several businesses including a turnaround in our global beef operations,” President and CEO David MacLennan said in a statement. “We also made good progress on moves designed to sharpen efficiency and support profitable growth in fiscal 2015 and beyond.”

Cargill said its fourth-quarter earnings were below average partly due to a loss caused by adjustments it had to make to account for Venezuela’s change in currency exchange rates.

The company added that its full-year earnings decreased in part because of the impact of China’s rejection of certain U.S. corn shipments, last year’s drought in the United States, and higher costs related to railcar shortages.

Cargill said its earnings rose significantly in its animal nutrition and protein segment this year, led by its beef business. It said earnings also rose in its global ocean transportation and U.S.-based steelmaking businesses.

Looking forward, Cargill said it will continue to invest in acquisitions and new and expanded facilities in emerging and developed markets—such as its $20 million investment in an animal feed facility in Vietnam in May.

“Cargill has a record $3.3 billion of major food and agricultural facilities under construction today in 13 countries,” MacLennan said. “As these facilities come on line, they enhance Cargill’s delivery of value-creating solutions to our food, agricultural and other customers.”

Cargill currently has 143,000 employees in 67 different countries. Forbes recently ranked the company as the largest private company in the United States, well ahead of Koch Industries and Dell.