Cargill's animal-protein business edges ahead
Jan. 8, 2015
by Erica Shaffer
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MINNEAPOLIS – Second-quarter earnings at Cargill climbed 40 percent on strong performances in the company's Origination & Processing and Animal Nutrition & Protein segments.
For the quarter ended Nov. 30, Cargill reported net earnings of $784 million, compared to $556 million a year ago. Revenues slipped 8 percent to $30.3 billion.
“With first-rate performance in our agricultural, animal nutrition and meat businesses, Cargill posted strong results, outpacing recent quarters by a good margin,” said David MacLennan, president and CEO. “Just as last quarter’s focus was on getting ready for North America’s big harvest, the current quarter was all about execution. Our team did an excellent job serving farmer customers and fully utilizing our supply chains to meet domestic and export demand.”
Results in Cargill's Animal Nutrition & Protein segment made significant gains from the comparable year-ago quarter. Cargill said a broad-based performance put the company's animal-protein businesses well ahead of last year. Australian beef processing, US cattle feeding and pork processing led segment results. Cargill's US turkey business posed one of its best holiday seasons, the company said. Cargill attributed the gains to actions taken to refresh its retail brands. Branded offerings of fresh bone-in turkey breasts and fresh whole turkeys raised without growth-promoting antibiotics attracted strong retail demand, the company noted.
Meanwhile, animal-nutrition results increased moderately. Cargill said lower raw material costs and applied expertise in micronutrients and other specialty ingredients contributed to the uptick.
Cargill's Origination & Processing segment was the largest contributor to the company's second-quarter results, with earnings sharply higher from the year-ago period. Soybean origination, crush volumes, and bean and meal exports surged ahead on a combination of record corn and soybean harvests in the US and strong domestic and export demand, the company said.
Results in the Food Ingredients & Applications segment retreated from the year-ago period, according to Cargill. Excluding a charge related to the announced closure of the Memphis, Tenn., corn mill, segment earnings were up moderately for the quarter.
Industrial & Financial Services results were mixed, but declined in total from 2014, Cargill said. Energy earnings climbed on a combined basis, reinforced by effective risk management in volatile global oil markets.
“We’re pleased to kick off Cargill’s 150th year in business with these positive results,” McLennan said. “We look forward to many more years of serving the changing needs of our customers and stakeholders.”