Cargill reports fourth-quarter and fiscal 2010 earnings

by Editor fleischwirtschaft.com
Thursday, August 19, 2010

Cargill Incorporated reported net earnings of $691 million in the fiscal 2010 fourth quarter ended May 31, compared with $327 million in the same period a year ago. Excluding earnings from its majority investment in The Mosaic Company, Cargill's fourth-quarter earnings rose 87% to $433 million.

Fourth-quarter revenues were $28.1 billion, an 11% increase from $25.4 billion in the year-ago period. For the full fiscal year, Cargill earned $2.6 billion, a 22% decrease from $3.33 billion in the prior year. Excluding Mosaic, Cargill's earnings rose 14% to $2.07 billion.

Full-year revenues were $107.9 billion compared with $115.1 billion a year ago. Cash flow from operations was $4.6 billion compared with last year's $6.7 billion.

All five of Cargill's business segments recorded increased earnings in the fourth quarter. Three of the five segments posted improved results in the full year.

Food ingredients earnings rise significantly

Earnings rose moderately in the food ingredients and applications segment in the fourth quarter and were up significantly for the full year. A mix of factors, including lower raw material costs, good cost management, firmer demand and more value-added products and services, contributed variously to the overall improvement in the segment, which is made up of nearly 40 food ingredient and animal protein business units.

The agriculture services segment, which provides crop and livestock producers with farm services and products, was up significantly in the fourth-quarter and full-year periods. Results were lifted by the late, large North American harvest and by improved costs and volumes in global animal nutrition products and services.

The risk management and financial segment rebounded from last year's loss to generate solid profits in the fourth quarter and in the full year; last year's performance was negatively affected in both periods by the 2008-09 global financial crisis. Within the segment, energy trading results were not as strong as those afforded by last year's extremely volatile and directional markets.

Although origination and processing earnings strengthened in the fourth quarter, full-year earnings were below the year-ago level, largely reflecting the changeover in the current year to choppy, range-bound markets that offered fewer trading opportunities. The segment sources, processes and distributes agricultural commodities and provides risk management services globally.

Industrial earnings rose considerably in the fourth quarter due to increased results from Cargill's majority investment in The Mosaic Company; full-year earnings from the Mosaic investment remained below the year-ago level. The rest of the segment posted improved results in fiscal 2010.
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