MINNEAPOLIS — Cargill’s earnings fell 56% in the year ended May 31 as the company dealt with cyclical trends in soybean processing and in the beef industry. Fiscal-year earnings of $1.17 billion compared with $2.69 billion in the previous fiscal year. Consolidated revenues increased 12% to $133.9 billion from $119.5 billion.
“Cargill’s global market analysis of supply and demand, and our trading expertise are long-standing strengths,” said Greg Page, chairman and chief executive officer of Minneapolis-based Cargill, when financial results were given Aug. 9. “Even so, we did not trade as well in this year’s markets, which were driven as much by the economic and political environment as by the fundamentals. Cyclical trends in the global soybean processing and North American beef industries also were in play, decreasing margins in parts of Cargill’s oilseed processing and beef processing operations.”
Cargill in the fiscal year was able to cut expenses by more than $400 million by realigning its cost structure and simplifying its work processes. Cargill invested more than $4 billion in acquisitions, joint ventures and facilities.
Cargill’s food ingredients group posted record fiscal-year earnings behind strong performances in sweeteners, starches, specialty oils and cocoa worldwide. Earnings fell in the animal protein businesses because of the cyclical downturn in North American beef and in origination and processing in part because of losses in cotton and sugar.
“Cargill’s earnings performance was not up to our expectations, though with notable exceptions,” Mr. Page said. “Our 26-unit food ingredients group delivered a third consecutive year of record earnings. One-third of our businesses exceeded last year’s results, and nine achieved record profits.”
In the fourth quarter, Cargill had earnings of $73 million, down 82% from $404 million in the previous year’s fourth quarter, and revenues of $34 billion, down 2% from the previous year’s fourth quarter.