Cargill 4th-Quarter Earnings Soar on Grain Handling, Processing

--Cargill earnings soar in fourth-quarter, fiscal year

--Company says grain trading and processing biggest contributor

--Results contrast with rivals who were hurt by drought

 
   By Ian Berry 
 

Cargill Inc.'s fiscal fourth-quarter earnings soared on strength in its grain-handling and food-ingredients businesses, as the company overcame the lingering effects of a historic U.S. drought.

The privately held company reported fourth-quarter earnings of $483 million in the quarter ended May 31, up from $73 million a year ago. The results capped a fiscal year in which earnings nearly doubled.

The biggest contributor to the earnings jump was Cargill's origination and processing segment, which includes trading and processing of agricultural commodities ranging from soybeans to sugar. One of the world's largest grain traders and meat processors, Cargill said it drew on its global footprint and market analysis to overcome tight supplies stemming from last year's drought in the U.S.

The company, based in suburban Minneapolis, does not break out results from its various segments. It noted its food ingredients segment posted record earnings, fueled by particularly strong profits in sweeteners, starches and cocoa.

"Nearly all of our businesses units were profitable, and more than two-thirds exceeded year-ago results," Chief Executive Greg Page said in a statement.

The company said fourth-quarter results improved for its agriculture services segment, and in its risk management and financial segment.

Profit in its industrial segment, which includes road salt, declined in the fourth quarter, but was higher for the full fiscal year.

Cargill's fourth-quarter revenue increased 4% to $35.4 billion. For the full fiscal year, Cargill, one of the world's largest privately held companies, reported earnings of $2.31 billion, up from $1.17 billion a year ago. Full-year revenue increased 2% to $136.7 billion.

The company's strong results contrast with those of rivals Archer Daniels Midland Co. (ADM) and Bunge Ltd. (BG).

ADM on Tuesday reported its second-quarter earnings fell 21%, while Bunge reported a 50% drop in second-quarter earnings last month. Both companies said tight grain and oilseed supplies in the wake of the historic U.S. drought weighed on profits.

Write to Ian Berry at [e-mail]

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