MINNEAPOLIS, Jan. 9, 2014 /PRNewswire/ -- Cargill today reported net earnings of $556 million in the fiscal 2014 second quarter ended Nov. 30, up 36 percent from $409 million in the year-ago period. First-half earnings were $1.13 billion, down 19 percent from $1.38 billion a year ago. Second-quarter revenues decreased 7 percent to $32.9 billion, which brought first-half revenues to $66.7 billion.
"Cargill posted a solid second quarter, with earnings improved in three of our four segments," said David MacLennan, Cargill's president and chief executive officer. "We also oversaw the opening of several new investments that support customers' growth and success." The company's results were supported in part by 2013's improved crop production. The impact on supply and demand caused prices for agricultural commodities to come down from last year's highs, providing relief to Cargill's animal nutrition and protein segment.
The Food Ingredients & Applications segment was up slightly from the year-ago period; it also was the largest contributor to second-quarter results. Demand in some product lines improved appreciably. For example, markets for cocoa powder saw firmer demand and sales volume, while increased U.S. corn supplies lifted domestic and export demand for ethanol. Still, many segment businesses experienced softer demand and sales volumes due to the sluggishness remaining in parts of the global economy.
Earnings in Animal Nutrition & Protein rose significantly. Improved profitability among the animal nutrition units was linked to lower input costs, good price risk management and a well-managed mix of bulk, specialty and customized animal feeds. The animal protein businesses also realized the effects of new-crop supplies, which eased last year's high feeding costs. Larger export volumes and increased operating efficiencies also contributed to stronger results, especially in beef processing.
Agricultural Supply Chain results decreased from the year-ago period, due in part to an industrywide buildup in oilseed crush capacity that reduced crush volumes in certain markets, including South America. In North America, profits increased due to higher grain handling and export volumes, along with renewed demand for grain marketing products.
Earnings in Industrial & Financial Services increased slightly. Although energy results were weak, the segment benefited from increased demand for ocean transport of coal and iron ore, and from favorable trends in U.S. steel manufacturing and processing.
Cargill completed the acquisition of Joe White Maltings in Australia, a key addition to better serving brewers in Australia and Asia, and providing Australian farmers with more marketing options.
Several projects came on line that better serve food, feed, farm and other customers. In the United States, Cargill began processing corn into ethanol at the Fort Dodge, Iowa, corn wet mill that was purchased in 2011. The facility will anchor the development of a biorefinery campus that can support the manufacture of other biobased products. Cargill's multiseed processing plant in West Fargo, N.D., was modernized and expanded to support increased demand from food processors and foodservice companies for sunflower and canola oils. Cargill began constructing a sunflower seed crush plant in southwestern Russia, its first crush facility in that country. The plant will produce sunflower oil for domestic and global food manufacturers. The company also purchased a minority stake in a deep sea port terminal in Novorossiysk on the Black Sea. The investment opens an important channel for connecting Cargill's Russian grain origination to customers in North Africa, the Middle East and beyond.
Cargill provides food, agriculture, financial and industrial products and services to the world. Together with farmers, customers, governments and communities, we help people thrive by applying our insights and nearly 150 years of experience. We have 142,000 employees in 67 countries who are committed to feeding the world in a responsible way, reducing environmental impact and improving the communities where we live and work. For more information, visit Cargill.com and our News Center.