Land O'Lakes first-quarter earnings edge upward
April 25, 2006
by Eric Schroeder
ARDEN HILLS, MINN. — Land O'Lakes, Inc. posted earnings of $26,112,000 in the first quarter ended March 31, up from $24,296,000 in the same period a year ago. Sales in the first quarter totaled $2,074,916,000, up narrowly from sales of $2,031,234,000 in the same period a year ago.
In generating improved sales and earnings, Land O’Lakes experienced strength in its Seed business, where pre-tax earnings for the quarter totaled $40.3 million, which compared with $28.7 million last year. Results were driven by increased volumes, with corn units up 13%, soybean units up 9% and alfalfa units up 38%.
The company’s Feed business was adversely affected by tighter margins, particularly in dairy and horse feed, but still managed to post a $3.3 million gain in pre-tax earnings.
Challenges continued to prevail in Dairy Foods and Layers/Eggs, Land O’Lakes said. The company sustained a pre-tax loss of $2.9 million in Dairy Foods during the quarter, as an $8 million asset sale gain was not enough to offset depressed dairy market prices, ongoing milk supply/processing demand balance issues and continued high energy and transportation costs. In its Layers/Eggs unit, Land O’Lakes reported a $6.3 million pre-tax loss, which was basically in line with one year ago.
During the quarter, Land O’Lakes acquired full ownership of MoArk L.L.C., which previously was a joint venture.