Cargill’s Profits Rise Four-Fold in Second Quarter

Cargill’s Profits Rise Four-Fold in Second Quarter

The positive results mark the second consecutive quarter of significant growth following a dismal conclusion to the company’s last fiscal year.

Cargill, Inc., said Wednesday that its earnings quadrupled during its most recent fiscal quarter, as profits climbed in four of its five business segments.

The Wayzata-based company—whose diverse business spans the agricultural, financial, and industrial markets—reported net earnings of $409 million for the quarter that ended November 30, up about 309 percent from $100 million during the same period a year ago. Revenue, meanwhile, grew more modestly, climbing 6 percent to $35.2 billion.

That marks the second consecutive quarter of significant growth following a dismal conclusion to the company’s last fiscal year. Cargill’s earnings plummeted more than 80 percent during last year’s fourth quarter and then climbed more than 310 percent in the first quarter of fiscal 2013. Cargill is the largest private company in the country.

Cargill Chairman and CEO Greg Page said in a statement that the company “posted a solid second quarter, with earnings balanced and diversified across the breadth of the company.”

“The steps we’ve taken over the past months to focus attention on what our customers value most, change how we work, instill more cost discipline, and invest in growth are paying off in the current year,” Page continued. “Most importantly, these changes are key to delivering sustainable growth year in and year out.”

The company said its origination and processing segment—which involves the sourcing and processing of grains and oilseeds, among other things—was the largest contributor to its second-quarter growth. “Strong global trading and risk management results in more fundamentally driven markets,” as well as an “improved margin environment in oilseed processing in several regions” contributed to the growth, the company said.

Despite rising ingredient costs, Cargill also saw growth in its agriculture services segment, due in part to the performance of Provimi, an animal nutrition company that it acquired in late 2011.

Cargill’s risk management and financial segment rebounded after posting a loss during last year’s second quarter, when it was dragged down by debt turmoil in the United States and Europe. Earnings in the company’s industrial segment also rose during the quarter.

Among Cargill’s primary business segments, earnings slid only in its food ingredients and applications area; the decline was driven in part by weakness in the company’s ethanol business. Its animal protein business, which is also part of the segment, made a profit after posting a loss last year “when processing margins in the U.S. beef industry were sharply negative,” the company said.