August 18, 2010

Cargill posts stronger Q4 earnings

Excluding earnings from its majority investment in The Mosaic Company, Cargill's fourth-quarter earnings rose 87% to US$433 million. Fourth-quarter revenues were US$28.1 billion, an 11% increase from US$25.4 billion in the year-ago period.

For the full fiscal year, Cargill earned US$2.6 billion, a 22% decrease from US$3.33 billion in the prior year. Excluding Mosaic, Cargill's earnings rose 14% to US$2.07 billion.

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

Greg Page, Cargill chairman and chief executive officer, said that 56% of the company's business units delivered increased earnings for the full year, including 20% at record levels.

"Over the past year, we opened 17 new and expanded facilities of significant scale, including joint ventures. Fifteen more major projects are under way. This represents a global, multiyear investment of more than US$1.1 billion," Page said.

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.

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.