Cargill 3Q Falls 68% Amid Weaker Demand, Trading
14 April 2009 - 3:53PM
Dow Jones News
Cargill Inc. said Tuesday that net profits fell 68% to $326
million in its fiscal third quarter, highlighting the tough
environment facing the global agribusiness sector.
All five business segments at the world's largest agribusiness
group by revenue reported lower year-on-year profits.
Privately-owned Cargill had been buoyed by its fertilizer and
grain-processing units in prior quarters, despite the reversal in
commodity prices from record levels in mid-2009.
The sharp decline in earnings may weigh on listed rivals such as
Archer Daniels Midland Co. (ADM) and Bunge Ltd. (BG), despite
executives' insistence that long-term demand trends remain
intact.
Cargill's narrowed profit in the fiscal third quarter to Feb. 28
compared with $1.03 billion a year earlier. Second quarter earnings
of $1.19 billion included a $310 million gain from asset sales.
Greg Page, chairman and CEO, said in a statement: "Cargill's
earnings turned down in the third quarter, as the troubles in the
global economy and financial system arrived at our company's
doorstep."
The company's origination and processing and industrial units -
which includes its stake in fertilizer maker Mosaic Co. (MOS) - had
supported earnings in recent quarters, but slipped in the latest
period.
Earnings from its large risk management and investment unit fell
for the seventh straight quarter. Profits also slipped at its food
ingredients and applications business, the cornerstone of efforts
to increase higher-margin sales.
The company did not provide a breakdown, but said sales and
demand had fallen "in many businesses", while trading opportunities
had also declined.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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