Weather woes and China's rejection of corn shipments contributed to slightly lower third-quarter earnings for Cargill.
CARGILL reported net earnings of $319 million in its fiscal 2014 third quarter ended Feb. 28, down 28% from $445 million in the year-ago period. Third-quarter revenues were $32 billion, essentially even with the year-ago period.
Cargill reported year-to-date earnings of $1.45 billion, down 21% from $1.83 billion in the nine-month period a year ago. Nine-month revenues totaled $98.7 billion.
"External events affected our quarterly results, even as we saw operational improvements in key businesses," said David MacLennan, Cargill president and chief executive officer. "Our animal protein results are much improved from last year, and with 2012's acquisition of Provimi, our global animal nutrition operations are on a record pace for the year.
"Despite one of the worst winters on record, we reliably delivered a near-record tonnage of road salt and deicing products to our customers across North America's snow belt," he added.
MacLennan said the company's earnings were trimmed by: a trading loss related to an unprecedented price spike in U.S. power markets in late January — part of which has been recovered, the rejection of certain U.S. corn shipments to China and weather-related disruptions to railway service in North America.
Among Cargill's four business segments, third-quarter earnings rose considerably in Animal Nutrition & Protein compared with the same period a year ago.
Within the segment, global animal nutrition results were boosted by improved volumes and an effective sales mix. Animal protein results were lifted by increased operating efficiencies and by exports of U.S. and Australian beef.
Earnings strengthened in the Industrial & Financial Services segment. Mixed but overall weaker results in energy and metals were offset by good performance in asset management and ocean transportation.
Food Ingredients & Applications earnings were solid, although moderately below last year's third-quarter performance — a period that included one-time gains from a trade-related claim and the sale of a cultures and enzymes business. Current results were tempered by lackluster consumer demand and by additional costs from recent acquisitions and new or expanded facilities in several countries.
The Origination & Processing segment finished the quarter below year-ago levels, with earnings tempered by costs related to corn trade with China and, in general, limited opportunities in grain trading and storage.
Cargill said its capital investment program for fiscal 2014 is on track.
In February, the company celebrated the grand opening of its new corn wet mill in Castro in Brazil's southern state of Parana.
It broke ground on two new facilities in India: a corn wet mill in the state of Karnataka and a dairy feed mill in the state of Punjab.
In Europe, Cargill is doubling the capacity of its chocolate facility in Mouscron, Belgium, to serve growing demand for specialty ingredients.
At its starches and sweeteners campus in Barby, Germany, Cargill is adding a new facility that will convert locally grown wheat into premium ethanol for the European beverage, cosmetics and pharmaceutical industries.
Cargill also completed the acquisition of two specialty chemical companies in the U.S. and Turkey that add more capacity and applications expertise to its bio-based industrial products business, which recently received the 2013 U.S. Presidential Green Chemistry Challenge Award.
As the fourth quarter began, the company opened its newly expanded research and development center in Vilvoorde, Belgium, a multidisciplinary hub for food and feed ingredient science as well as non-food applications such as personal care and fermentation technology.