Cargill doubles second-quarter earnings
January 12, 2011
by Meat&Poultry Staff
MINNEAPOLIS — Net income at Cargill in the second quarter ended Nov. 30 totaled $1.49 billion, up sharply from $489 million in the same period a year ago. In the first six months ended Nov. 30, the company earned $2.37 billion, up 135% from $1.01 billion in last year’s first half. Excluding earnings from its majority investment in The Mosaic Co., Cargill said its earnings were up 98% and 74% in the second quarter and first half, respectively.
Sales in the second quarter rose 16% to $31.1 billion.
“Cargill generated strong results across the breadth of our businesses,” said Greg Page, chairman and chief executive officer. “The diversity and balance built into the mix provides the company with a great deal of resilience. By tapping the connectivity among our businesses, we also put more knowledge and insight to work on behalf of our customers. Increasingly, they look to Cargill for innovation that supports their growth objectives.”
Four of Cargill’s five business segments posted higher earnings in the second quarter, led by the origination and processing segment. According to Cargill, the segment “developed an early and accurate read on the first quarter’s weather events and subsequent shifts in trade flows and supply-and-demand dynamics. This enabled the segment to serve import-dependent customers with grain rerouted from alternate origins while handling substantial volatility across agricultural commodity markets.”
Cargill said second-quarter results also rose in agricultural services, boosted by bigger grain handling volumes, and in its industrial segment, where results were lifted by the increase in earnings from Cargill’s majority investment in The Mosaic Co.
Mixed results were noted in food ingredients, where some units benefited by better volumes and gains from risk management activities and other units were pressured by higher raw material costs.
Earnings fell in the risk management and financial segment, reflecting sluggish demand in range-bound energy markets, Cargill said.
Cargill announced several acquisitions during the second quarter, including the purchase of Unilever’s shelf-stable condiments business in Brazil, a majority share position in starch producer PT Sorini Agro Asia Corporindo Tbk, and the AWB commodity management business of Agrium. While Agrium is based in Calgary, Alta., the AWB commodity management business will involve Australian grain growers.