Land O'Lakes earnings more than double in quarter

by Eric Schroeder
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ARDEN HILLS, MICH. — Net income at Land O’Lakes, Inc. in the first quarter ended March 31 rose 110% to $54,937,000, up from income of $26,112,000 in the first quarter of last year. Net sales rose 9% in the quarter to $2,182,283,000, which compared with sales of $1,996,718,000 in the year-ago period.

The company said solid performances in dairy foods, feed, layers/shell eggs and agronomy more than offset declines in the company’s seed business.

Overall, the dairy foods segment registered pre-tax earnings of $20.4 million, which compared with a loss of $2.9 million in the first quarter of 2006. Land O’Lakes said the improvement reflected better dairy markets, ongoing brand strength, a continued focus on cost control and supply chain efficiency, and continued progress in balancing manufacturing operations with milk supply and processing demand.

The feed division posted pre-tax earnings of $4.3 million, up 30% from $3.3 million in the first quarter of 2006. Feed sales were $749 million, up approximately 8% from the same period a year ago.

The layers/eggs division, which the company participates in via MoArk L.L.C., a wholly owned subsidiary, reported pre-tax earnings of $4.2 million. This compared with a pre-tax loss of $6.3 million in the same period a year ago. Sales for the quarter were $120 million, up $12 million from the first quarter of 2006.

The company’s agronomy business, conducted through the joint venture Agriliance, recorded pre-tax earnings of $2.1 million, compared with a loss of $6.4 million in the same period last year.

The only unit to suffer a decline was the seed division, which posted pre-tax earnings of $34 million, down 16% from $40.3 million in the first quarter of 2006.

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