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UPDATE 1-Cargill 3rd-qtr profit rises on food ingredient, protein demand

Published 2017-03-29, 11:00 a/m
© Reuters.  UPDATE 1-Cargill 3rd-qtr profit rises on food ingredient, protein demand

(Adds business segment results, byline)

By Karl Plume

CHICAGO, March 29 (Reuters) - Global commodities trader Cargill Inc CARG.UL reported a higher quarterly profit on Wednesday as strong earnings from its food ingredients and protein units more than offset lagging results from South American grain trading and processing.

The privately held company has been streamlining its operations to focus on higher-margin businesses such as food ingredients and fish feeding business, aiming to bolster earnings and capitalize on consumer trends. The efforts have lifted results in recent quarters, according to Cargill.

"We had strong results this quarter across our segments, evidence that we are on the right path forward," Chief Executive Officer David MacLennan said in a release.

Cargill said adjusted operating earnings rose 50 percent to $715 million in the third quarter ended Feb. 28, from $476 million in the same quarter a year earlier.

Excluding one-time items, net income climbed to $650 million from $459 million a year earlier, while revenue rose 8 percent to $27.3 billion.

Food ingredients and applications results outperformed the previous year on improvement in global sweeteners and plant-based industrial products in North America.

Cargill's animal nutrition and protein unit also topped last year's weak third quarter as strong North American demand for beef and improved poultry sales in Europe and Southeast Asia bolstered results.

However, lower feed ingredients sales in South Korea, where avian influenza has wiped out thousands of poultry flocks, as well as in Russia and China dampened earnings.

Profit declined in the company's origination and processing segment, which makes money buying, selling, storing, shipping and processing crops.

Slow crop sales by farmers in Argentina and drought-reduced corn exports from Brazil weighed down profits, offsetting gains from robust grain exports from the United States, where farmers harvested record corn and soybean crops last autumn.

Rebounding ocean freight rates and stronger year-on-year energy and metals markets helped reverse last year's third-quarter loss for Cargill's industrial and financial services unit. (Editing by Jeffrey Benkoe)

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