May 14, 2013

Land O'Lakes sales up 8%, net earningsdown 16% in Q1

Land O'Lakes, Inc. announced its first quarter financial results on May 14, reporting quarterly net sales of US$4.2 billion, up by 8% on year, and net earnings of US$72 million, down by 16% on-year.

Company officials described the first quarter performance as "solid and in line with expectations", noting that gross profit for the first quarter increased by 6% versus the prioryear, while net earnings were down16% due mainly to higher spending on advertising and promotion of new products across the businesses.

"Land O'Lakes has begun 2013 with solid sales growth and strong operating performance in our business units," said Chris Policinski, president and CEO of Land O'Lakes. "Our crop inputs business, which is operated under Winfield Solutions LLC, had a record year in 2012 and continued to deliver strong earnings in the first quarter of 2013, slightly below prior year because of weather-related timing of spring planting," he added.

Land O'Lakes retail dairy business had an impressive first quarter, primarily due to strong earnings in its flagship branded butter products. Innovative offerings continued to be added to dairy foods such as the new Sauté Express™Sauté Starter.

New acquisitions in dairy foods, such as the Kozy Shack line of premium refrigerated desserts, have also begun to produce significant earnings. Total dairy foods gross profit increased by 56% versus the prior year, which was offset by higher spending on advertising and promotion.

"Our feed business, operated through Purina Animal Nutrition LLC, showed improved operating profit in 2013 as well," Policinski added. "Our layers egg business was challenged by high feed costs and low commodity egg prices, generating results similar to the prior year," he added.