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.
Cargill isn't the only food company chilled by this winter's weather woes.
General Mills' (GIS) 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.
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