First quarter reports hard time for Cargill

By Nicholas Zeman | September 18, 2009
Posted October 14, 2009

Often there's a let-down after a record year. Cargill today reported net earnings of $525 million in the fiscal 2010 first quarter ending Aug. 31, down 65 percent from the record $1.49 billion in the same period a year ago. The Minneapolis-based processor mentioned its investment in The Mosaic Company, a crop nutrition company that specializes in concentrated phosphate and potash marketing, for weighing down the current fiscal performance.

Earnings in agriculture services, food ingredients and applications-among Cargill's five business sectors-were actually up from last year's first quarter, due in part to lower raw material costs, reduced operating costs and changes to product mix. "Risk management and financial results rose significantly, reflecting a return to profitability by its financial investment subsidiaries and good performance among the energy businesses," the company stated. "Origination and processing earnings were solid, though down from last year's record performance."

Compared to same period last year the numbers are dismal, but the company iterated that the situation is nevertheless improving. "Cargill posted a solid quarter, notwithstanding the comparison to last year's all-time record," said Greg Page, Cargill chairman and chief executive officer. "Our business unit earnings were broad based, and they were up considerably from the final two quarters of fiscal 2009."

Mosaic reported net earnings of $100.6 million, or $0.23 per diluted share, for the first fiscal quarter ending August 31, 2009. These results compare with net earnings of $1.2 billion, or $2.65 per share, for the first quarter of 2008.
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