Cargill Profit Drops 41% After Weaker Crop Volume, EnergyShruti Date Singh
Cargill Inc., the largest closely held U.S. company, posted a 41 percent drop in fiscal first-quarter earnings after a decline in U.S. crop volumes and profitability at its energy-trading operation.
Net income fell to $571 million in the three months through Aug. 31 from $975 million a year earlier, the Minneapolis-based company said in a statement today. Revenue was unchanged at $33.8 billion, it said.
The worst drought since the 1930s cut U.S. grain output last year. The subsequent decline in Northern Hemisphere crop supplies led to less profit at Cargill’s origination and processing unit, which handles commodities including corn.
Cargill said earnings were down “significantly” at its industrial and financial services segment. Mild weather reduced demand for commodities such as coal, gasoline and natural gas, Lisa Clemens, a Cargill spokeswoman, said in a phone interview. Results from the asset-management business, which includes investment firm Black River Asset Management LLC, were lower because of “rising economic pressures in emerging markets,’‘ Cargill said in the statement.
Food ingredients and applications, a segment that supplies food manufacturers and retailers, saw lower profit after experiencing ‘‘choppy markets.’’ Profit was up ‘‘slightly’’ at the animal nutrition and protein unit following efficiency gains at U.S. slaughterhouses, the company said.
Cargill also said today its acquisition of Joe White Maltings in Australia from Glencore Xstrata Plc, which will enable it to serve brewers in that country and in Asia, is expected to be completed before the end of the year after regulatory approval. Cargill said it bought Prairie Malt in Saskatchewan, Canada, and a shrimp-feed manufacturer in Thailand.