This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Winter Puts a Hurt on Cargill's 3Q Earnings

NEW YORK (TheStreet) -- Winter was not kind to Cargill.

The privately held agricultural giant reported net earnings of $319 million in the fiscal 2014 third quarter,  down 28% from $445 million in the same period, a year ago. In a statement, President and CEO David MacLennan said, "External events affected our quarterly results, even as we saw operational improvements in key businesses."

The company, whose businesses include grain trading and processing, meatpacking and salt mining, is closing the books on one of the worst winter seasons on record. Disruptions from Old Man Winter delayed railway service in North America. Earnings took a hit from a trading loss related to an unprecedented spike in U.S. power markets in late January. Cargill also faced the rejection of certain corn shipments to China.

Courtesy of Cargill

Business segments showing growth in the fiscal third quarter include Animal Nutrition & Protein thanks to improved volumes. The Industrial & Financial Services unit saw good performance in asset management and ocean transportation, which offset overall weaker results in energy and metals.

Food Fallout?

Cargill isn't the only food company chilled by this winter's weather woes.

General Mills' (GIS - Get Report) third-quarter results showed falling sales, and the company also blamed this year's severe winter. As we get deeper into corporate earnings season, will competitors including Archer Daniels Midland (ADM) and Bungee (BG) experienced similar setbacks when they report results? ADM reports first-quarter results April 29 while Bungee reports May 1.

What's next for Cargill? According to the company, even though 43% of its gross investment is in North America, in the fourth quarter and fiscal 2014 it'll focus on its many international assets that are gearing up to help boost profitability. 

The company said it is focused on a new corn wet mill it just opened in Brazil. It also broke ground on two new facilities in India. It also plans to double the capacity of its chocolate facility in Belgium to serve the growing demand.  Cocoa prices have been on rise as emerging markets grow a sweet tooth for chocolate.

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Karina Magalong, a former producer with Bloomberg and CNN, writes about business.  She is a graduate of Hofstra University, and lives in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GIS $61.35 0.15%
AAPL $93.75 -1.10%
FB $117.53 0.69%
GOOG $693.00 0.29%
TSLA $240.76 -2.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs