The lower earnings were attributed to the continued down economic cycles in the agricultural and energy sectors, which have resulted in reduced commodity prices and lower margins globally, the company said. Fiscal 2016 revenues through May 31 were $22.2 billion, down 17% from $26.6 billion for the first three quarters of fiscal 2015, and primarily reflected lower selling prices for the energy, grain and fertilizer products the company handles.
CHS net income for the third quarter of fiscal 2016 (March 1 through May 31), was 7% ahead of the same period of fiscal 2015. CHS reported net income of $190.3 million for the third quarter of fiscal 2016, compared with $178.1 million for the same period in fiscal 2015. Results for the third quarter of fiscal 2016 were attributed to increased pre-tax earnings for the company's Energy segment and its Corporate and Other category, as well as the new CHS Nitrogen Production segment. Results also reflected a reversal of lower cost or market charges taken earlier in fiscal 2016 within the Energy segment when energy product prices were lower. Revenues for the third quarter of fiscal 2016 were $7.8 billion, down 10% compared with $8.7 billion for the third quarter of fiscal 2015.
For the first three quarters of fiscal 2016, operating income reflected lower pre-tax earnings in the CHS Energy and Ag segments. These were partially offset by increased earnings in the Corporate and Other category, as well as the addition of the company's new Nitrogen Production segment.
Year-over-year earnings declined within the CHS Ag segment, which includes the company's wholesale crop nutrients, renewable fuels, Country Operations retail, animal nutrition and sunflower processing; grain marketing, and processing and food ingredients businesses. Lower earnings in this segment were largely attributed to soft market conditions across the agricultural sectors CHS serves. Lower grain margins resulted in decreased earnings within grain marketing and Country Operations. Earnings for the company's wholesale crop nutrients business also declined compared with the same period of fiscal 2015 due to lower margins. CHS renewable fuels marketing and production earnings decreased through nine months of fiscal 2016 when compared with the same period of fiscal 2015, largely due to lower market prices for ethanol. CHS processing and food ingredients earnings decreased primarily due to a charge associated with disposal of the assets and a customer receivable, the company said.
CHS Energy segment earnings through the third quarter of fiscal 2016 also declined year-over-year primarily due to lower refining margins, along with decreased earnings for the company's lubricants and transportation businesses. Propane earnings through nine months of fiscal 2016 increased from the same period of fiscal 2015.
CHS generated income before taxes in its newly established Nitrogen Production segment of $26.3 million, resulting from its February 2016 equity method investment of $2.8 billion in CF Industries Nitrogen, LLC.
CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate and Other category. Corporate and Other earnings for the first nine months of fiscal 2016 increased over the previous year primarily due to increased hedging and capital volumes and lower compensation and benefit costs.