MINNEAPOLIS, Oct. 7, 2015 /PRNewswire/ -- Cargill today reported financial results for the fiscal 2016 first quarter ended Aug. 31, 2015. Key measures include:
- Adjusted operating earnings in the first quarter were $611 million, compared with $619 million in the same period a year ago.
- Net earnings were $512 million, a 20 percent increase from last year's $425 million.
- Revenues were $27.5 billion, down 17 percent from $33.3 billion a year ago.
Segment performance:
The Origination & Processing segment made the largest contribution to Cargill's first quarter, with adjusted operating earnings up slightly from a year ago. Within the platform, combined results for the grain and oilseed supply chain businesses rose considerably, based on effective positioning in agricultural commodity markets distinguished by persistent downward trends and occasional sharp price reversals. Soybean crush results strengthened globally, boosted by improved capacity utilization in South America and an unusually long processing season in North America. Performance in North American farm services lagged last year's strong first quarter, reflecting a return to more normalized levels in Canada after two very large crop years.
Adjusted operating earnings in Animal Nutrition & Protein decreased in the first quarter, with increased results in animal nutrition offset by lower earnings in animal protein. Global animal nutrition earnings exceeded last year's solid start due to higher sales volumes of customer-aligned products and services, and good cost management. Areas of particular strength included the U.S. and Vietnam, and aquaculture nutrition in Latin America. Within the segment's animal protein businesses, poultry results in Central America, Europe and the U.S. rose on strong operational and marketing performance. Unseasonable pressures in cattle and beef markets led to a weaker quarter in North American beef. Cattle costs remained high, and continued high beef prices caused consumers to seek less expensive alternatives such as pork and poultry.
Results in Food Ingredients & Applications were down slightly from last year's first quarter, though efforts to reduce costs and improve performance showed good progress across the segment. Profitability in starches and sweeteners was pressured in Europe by historically low sugar prices, and in North America by the impact of low crude oil prices on markets for corn-based ethanol. Other ingredients within the segment's portfolio also saw slippage in earnings, as did staple foods in some emerging markets. In contrast, salt results rose on new volume from last year's purchase of a salt facility in Michigan and lower freight costs. The acquisition of ADM's chocolate business was completed in late July and integration is proceeding smoothly.
Industrial & Financial Services' adjusted operating earnings declined as hedge fund closures at a Cargill-owned asset management subsidiary overshadowed a good start in the industrial units. The energy businesses posted a solid first-quarter profit due to effective trading strategies in more volatile, downward trending markets. Metals and ocean transportation also posted better results in challenging markets. Full report.
