Strong results in sweeteners, salts, cocoa and chocolate within its Food Ingredients & Applications segment boosted Cargill earnings in the third quarter ended Feb. 28.
Net earnings on a U.S. generally accepted accounting principles (GAAP) basis were $650 million, up 42% from $459 million in the previous year’s third quarter, the Minneapolis-based company reported March 29. Adjusted operating earnings were $715 million, up 50% from $476 million. Cargill in the previous year’s third quarter realized gains from business divestitures, which were excluded from adjusted operating earnings. Revenues in the third quarter rose 8% to $27.3 billion.
“We had strong results this quarter across our segments, evidence that we are on the right path forward,” said David MacLennan, chairman and chief executive officer for Cargill.
The Food Ingredients & Applications segment made the largest contribution to adjusted operating earnings in the third quarter. Gains came in sweeteners globally and in plant-based bio-industrials in North America. A favorable product mix in salts for food applications and seasonal sales volume in deicing products also boosted results in North America.
Cocoa and chocolate earnings rose on the strength of the European business, supported by origination in West Africa. In Cargill’s Asia-based business, corn-based starches and sweeteners in China performed well as did edible oils in India.
Within Cargill’s Origination & Processing segment, earnings in the third quarter slightly lagged last year’s third-quarter results. Thanks to grain export volumes, the North America-based business was a large contributor. Oilseed crush volume decreased late in the third quarter as South America approached harvest season. Cargill’s business in South America dealt with reduced farmer selling and slowed processing in Argentina because of excess rain. Corn exports in Brazil decreased because of last year’s drought.
Within Cargill’s Animal & Nutrition Protein segment, third-quarter earnings rose as animal protein performance improved against a weak third-quarter performance in the previous year. The North American protein business continued to benefit from renewed consumer demand for beef although earnings pace was below that set in the first half.
Food service demand for egg products was steady. Higher cooked chicken exports out of Southeast Asia and improved processing results and fresh chicken sales in Europe boosted the poultry business.
Within Industrial & Financial Services, the third-quarter performance was strong when compared to a weak third quarter last year. Ocean transportation earnings rose due to better market conditions in ocean freight as well as in the mining and steel industries.For the nine-month period ended Feb. 28, Cargill companywide had net earnings of $2.49 billion, up 5% over the same time period of the previous year. Adjusted operating earnings for the nine-month period were $2.58 billion, up 55% from $1.66 billion. Nine-month revenues were $81.4 billion.