ARDEN HILLS, MINN. — Land O’Lakes, Inc. reported third-quarter and year-to-date financial results, while also commenting on individual business unit performance. For the third quarter, the company posted net earnings of $80.4 million, which compared with a loss of $29.9 million in 2004. Sales for the quarter were $1.7 billion in 2005 versus $1.8 billion in fiscal 2004.
Third-quarter results include unrealized pre-tax hedging gains of approximately $700,000 compared with unrealized pre-tax hedging losses of $19.9 million for the third quarter of 2004.
For the first nine months of fiscal 2005, the company accrued net earnings of $130.6 million compared with net earnings of $32 million in the first nine months of fiscal 2004. Year-to-date, sales were $5.6 billion compared with sales of $5.8 billion in the first nine months of 2004.
Both the year-to-date and third-quarter sales declines were due primarily to weak egg markets, with average egg prices over the first three quarters down 27% from one year ago. The company’s financial results also include a net earnings impact of $82.6 million due to a gain from the sale of the company’s 38% ownership in CF Industries, Inc., a company involved in fertilizer manufacturing.
Sales in the company’s dairy foods division through September were $2.8 billion, as compared with $2.9 billion a year ago. Sales for the quarter totaled $952 million, basically flat versus the third quarter of 2004.
Dairy foods reported a pre-tax loss of $5.9 million through September 2005, a $5.8 million improvement over the first three quarters of 2004. For the third quarter, the company reported $3.1 million in earnings in dairy foods, as compared with a $3.7 million pre-tax loss for the third quarter of 2004.
From a volume perspective, year-to-date retail butter volume was up 2% versus 2004, although branded butter was down 4%. Total butter and spreads volumes was flat versus one year ago, as was total cheese volume, where a 4% increase in deli cheese volume was offset by a volume decline in dairy case cheese.
Depressed markets had an impact on the company’s performance in the eggs business, which Land O’Lakes participates in through its MoArk joint venture. Average egg prices over the first three quarters were 69c per dozen, as compared with 95c per dozen over the same period one year ago. Year-to-date, the joint venture is reporting $287 million in sales and a $27.6 million pre-tax loss, as compared with $430 million in sales and $27 million in pre-tax earnings through September 2004.
For the third quarter, the joint venture is reporting $96 million in sales and a $5.3 million pre-tax loss, as compared with $111 million in sales and $9.9 million pretax loss for the third quarter of 2004. Year-to-date, volumes are up slightly in both shell eggs and processed egg products.