Financial results for the company’s third quarter, which ended February 28, were released Wednesday. The report included overall improvement for adjusted operating earnings, net earnings and revenue.
“We had strong results this quarter across our segments, evidence that we are on the right path forward,” said David MacLennan, Cargill’s chairman and chief executive officer. Improved results for the quarter were based on results in animal protein, food ingredients and industrial segments, he said.
Feed sector specifics
Earnings for animal nutrition and protein increased for the quarter with strong performance reported for animal proteins in contrast to a weak period at this point last year, said Cargill. But the segment did not meet the earnings pace set during the first half of the year.
The protein business in North American continued to be strong owing to improved consumer demand, the company said. Poultry and egg production also played a part in the positive results for the sector.
However, third-quarter earnings results for global animal nutrition dropped from the previous year, the company reported. “Despite good performance in bulk feeds and premix products in India, Vietnam and other countries, sales volume softened due to competitive pressure in China and Russia, an avian influenza outbreak in Korea, and disruptive or unseasonable weather in other countries,” it added.
Overall, the Minnesota-based agri-giant saw a 50% increase in its adjusted operating earnings from the same quarter a year ago, it said. Third quarter operating earnings were $715m, up from $476m for the same period in 2016.
Similarly, earnings for the nine-month period were $2.58bn, a 55% bump from the earnings for that period the previous year, the company said.
Net earnings for the quarter were $650m, up from $459m the previous year, said Cargill. The increase amount to a 42% boost.
Net earnings for the nine-month period were $2.49bn, which was a 5% increase year-on-year, Cargill said. The company had large gains stemming from business divestitures; however, those are not included in the reporting of adjusted operating earnings.
Additionally, the company saw an 8% increase in revenue for the third quarter, the company said. Quarter revenues were $27.3bn with year-to-date revenues of $81.4n.
Grain sales and handling
In origination and processing, earnings were behind last year’s third quarter, the company said.
The North American-based business was strong with steady grain export amounts, the company reported. However, there was a drop in crush volume for oilseeds as South America neared its harvest period.
The company saw challenges in South America, and area results were reduced from the prior year, Cargill said. Farmer selling was down, processing in Argentina was slowed by excessive rain and the drought in Brazil led to reduced corn exports.
Asia Pacific had improved earnings for the segment based on an increase in soybean crush activities in China, and a bump in grain origination and trading in Australia, the company said.