MINNEAPOLIS — Cargill’s Animal Nutrition & Protein segment provided the largest contribution to adjusted operating earnings in the second quarter ended Nov. 30, 2016. 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 foodservice.
The Food Ingredients & Applications segment rebounded in the second quarter when compared with the previous year’s second quarter. Overall adjusted operating earnings rose 80 percent to $1.03 billion, which compared with $574 million in the previous year’s second quarter.
The Net earnings for the quarter on US generally accepted accounting principles (GAAP) were $1.39 billion, down 29 percent 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 percent.
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.
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 US and Canadian grain origination, oilseed crush and export facilities. Terminals on the US Gulf and in Vancouver, British Columbia, ran at capacity.
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 CEO 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.”
Cargill in the first half of the year had adjusted operating earnings of $1.86 billion, which was up 57 percent over the same time period of the previous year. Net earnings were $1.84 billion in the first half, down 3 percent. First-half revenues were $54 billion, down 1 percent.