MINNEAPOLIS — Cargill reported positive news in all four of its business segments as adjusted operating earnings rose 35% to $827 million in the first quarter ended Aug. 31, which compared with $611 million in the previous year’s first quarter.
Net earnings on a U.S. GAAP basis were $852 million, up 66% from $512 million. The variance between adjusted and net earnings largely was a function of timing differences related to inventory, derivatives and hedging, Cargill said when reporting first-quarter results on Oct. 4. First-quarter revenues of $27.1 billion were down slightly from $27.5 billion in the previous year’s first quarter.
|David MacLennan, chairman and c.e.o. of Cargill|
“We posted a strong start to the new fiscal year,” said David MacLennan, chairman and chief executive officer of Minneapolis-based Cargill. “We’ve been charting a new path to higher performance, and it’s rewarding to see the many changes we’ve made resulting in gains across much of the company.”
He added recent acquisitions have brought in new capabilities as Cargill works to optimize plant efficiency, supply chains and cost structure.
“These actions are making us more competitive and equipping us to serve a broadening range of customer needs,” Mr. MacLennan said.
In Cargill’s Origination & Processing business segment, earnings rose moderately from earnings in the previous year’s first quarter. Soybean processing margins improved, and the reversal of mark-to-market losses also improved earnings. Good performances came from Brazil, North American grain exports, canola in Canada, and biodiesel in North America and Europe.
Earnings rose in Food Ingredients & Applications due to improved earnings in starches and sweeteners as well as edible oils. Cocoa and chocolate products contributed even though a shortage of mid-crop cocoa beans in Ghana restrained earnings. Salt earnings were flat.
Adjusted operating earnings were up sharply in the Animal Nutrition & Protein segment, which was the largest contributor to adjusted operating earnings in the first quarter. The beef business received boosts from the North American market’s ongoing transition to increased cattle supplies and renewed consumer demand for beef. Earnings increased for the global group of poultry businesses, along with U.S.-based turkey and further processed eggs. Animal nutrition reported sales growth in parts of Asia and in North America.The Industrial & Financial Services segment was profitable in the first quarter. Returns from Cargill’s asset management investments offset weak performances in other parts of the Industrial & Financial Services segment.