UPDATE 1-Cargill doubles annual earnings after strong quarter
CHICAGO, Aug 7 (Reuters) - U.S. agribusiness giant Cargill on Wednesday reported a six-fold rise in fourth quarter net earnings and nearly doubled full-year earnings, citing strength in its core grain-based and financial services.
Minneapolis-based Cargill, one of the world's largest privately held corporations and a top commodities trader, reported $483 million in earnings for the fourth quarter ended May 31, up from $73 million a year earlier when the company was hurt by volatile commodity markets and reported its worst quarter in more than 20 years.
For the full year, Cargill, the largest grain exporter from the United States - the world's top grain export nation - earned $2.31 billion compared to $1.17 billion a year ago, when the company was squeezed by soft economies and volatile markets.
"Cargill's earnings improved significantly over the prior year," said Greg Page, Cargill chairman and chief executive officer. "Nearly all of our business units were profitable, and more than two-thirds exceeded year-ago results."
While most of Cargill's units were profitable, earnings at its animal protein business were down from last year, largely hurt by high feed costs and the tightest U.S. cattle supply in 60 years. Energy businesses, including trading, also declined.
Cargill's commodity trading rivals Archer Daniels Midland and Bunge in the last two weeks have reported disappointing earnings for the quarter ended June 30, tied to short supplies of corn and soybeans due to the historic U.S. drought last summer. Crops have recovered this year and a bumper harvest is expected to start in September.
Among Cargill's five major business areas, the origination and processing segment was the largest contributor to earnings in both the fourth quarter and full year, the company said in a statement.
"The segment drew on Cargill's global footprint and strengths in market analysis, logistics and risk management to overcome the supply challenges caused by weather disruptions and tight stocks, serving customers reliably. The segment also realized turnarounds in cotton and sugar from the prior year," it said.
Earnings in the risk management and financial segment rose considerably from the year before.
Cargill's big food ingredients business, which supplies hundreds of products to food and beverage makers, also saw improved results after last year's record earnings, the company said. "Performance was particularly strong in sweeteners, starches and cocoa in several countries," it said.