Cargills quarterly profits plunge
Cargill last week reported net earnings of $327 million in its fiscal fourth quarter ending May 31, a 69 percent decline from $1.05 billion in the year-earlier period, but still managed the second most profitable year in the company’s history.
Full-year earnings were $3.33 billion, down 16 percent from a record $3.95 billion in the previous year. Sales for the full year dipped 3 percent to $116.6 billion, while cash flow from operations fell 6 percent to $6.7 billion, the company said in a statement.
“This year was a tale of two halves,” said Greg Page, Cargill chairman and CEO. “Cargill posted record results through November. In the second half, earnings slowed considerably.”
He added that Cargill’s business diversity also helped. Among the company’s five business segments, fourth-quarter earnings in agriculture services and in food ingredients and applications rose from last year due to cost cuts, product mix adjustments, and collaboration with customers on value-adding solutions. The origination and processing segment reported significant profits, although down from last year’s performance.
The risk management and financial segment posted a loss due to financial market activities. Meanwhile, earnings in the industrial segment were down “significantly” from fourth quarter 2008. Full fiscal-year earnings in the origination and processing segment ended up just below last year’s record high. Food ingredients and applications results also slipped somewhat. The agricultural services segment also finished a bit below the year-ago level. The risk management and financial segment incurred a loss, while Cargill’s energy businesses posted record results.
Cargill officials said they expect the effects of the global economic recession to last for some time. — WLJ