Photo courtesy of Cargill.
Net earnings for the quarter on U.S. generally accepted accounting principles (GAAP) were $1.39 billion, down 29% from the previous year’s second quarter when Cargill realized gains from business divestitures, which are excluded from adjusted operating earnings. Second-quarter revenues of $26.9 billion were down 1%.
Earnings in the Origination & Processing segment, bolstered by performance in North America, rose slightly. The United States saw record corn and soybean crops, which were met with robust demand stemming from domestic and international growth in livestock production and reduced South American competition for exports.
Cargill increased volume across its U.S. and Canadian grain origination, oilseed crush and export facilities. Terminals on the U.S. Gulf and in Vancouver, B.C., ran at capacity.
The Animal Nutrition & Protein segment provided the largest contribution to adjusted operating earnings in the second quarter. Thanksgiving holiday demand boosted whole-bird sales in the turkey business. A more normal cattle supply, optimized production and consumer demand led to a recovery in beef from last year’s low. The egg business reported strong sales volume in food service.
Within the Food Ingredients & Applications segment, sweeteners and edible oils made gains in most regions. Cocoa and chocolate had moderately better results as improved press margins in Europe helped make up for crop difficulties in West Africa that limited origination volume. In North America, increased production helped lift ethanol earnings, but salt and de-icing results slipped as North American customers carried over inventories of de-icing products from the previous year’s mild winter.
The Industrial & Financial Services segment also rebounded from a weak second quarter in the previous year. More active markets for crude oil and refined products, natural gas and electric power, ocean transportation and iron ore all boosted earnings.
|David MacLennan, chairman and CEO of Cargill.|
“We are energized by the results across our businesses, which are due to the hard work and commitment of our teams worldwide,” said David MacLennan, chairman and chief executive officer of Minneapolis-based Cargill, when results were reported Jan. 10. “Our increased profitability gives us confidence that we are achieving the broad-based structural improvements we have sought.”