Agricultural conglomerate Cargill Inc. said its fiscal first-quarter earnings rose 20 percent from a year earlier, as the company also bounced back from posting its first loss in 14 years in its previous quarter.
Still, lower commodities prices pressured revenue. Cargill spokeswoman Lisa Clemens noted overall sales volume was flat, but prices pushed revenue lower. She also noted that Minneapolis-based Cargill, which operates a beef processing facility in Fort Morgan, recently formed a sugar joint venture, so revenue from that line was now redirected there, rather than into Cargill’s top line.
In a news release, the company said it faced “weather-driven agricultural commodity markets, as well as the effects of more volatile emerging markets, currency fluctuations and other macroeconomic uncertainty” during the quarter.
Cargill said its origination and processing segment saw adjusted operating earnings rise slightly.
“That performance is attributed in part to our reading of the market,” Clemens said. “Those June, July, August months can be quite volatile … but the team did a good job reading those markets, and that’s in part why we saw good results in that segment.”
Meanwhile, food ingredients and applications performance was “down slightly,” the company said. It said its animal nutrition and protein segment saw adjusted operating earnings decrease.
The grain-and-meat giant has been planning changes to the way it produces food, as it grapples with rapidly shifting consumer tastes and looks to become more profitable and streamline it sprawling business lines. In August, it reported its first quarterly loss in 14 years.
The company has said it will make its supply chains more transparent and provide more products that are made without genetically modified crops or animal drugs.
On Wednesday, CEO David MacLennan said in a statement that “we made good headway on operational improvements aimed at strengthening business performance”
For the quarter ended Aug. 31, Cargill reported a profit of $512 million, up from $425 million a year earlier. On an adjusted basis, the company said it earned $611 million, down from $619 million. Revenue dropped 17 percent to $27.5 billion.
