Cargill profits more than double; broad growth

CHICAGO Tue Apr 13, 2010 1:14pm EDT

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CHICAGO (Reuters) - U.S. agribusiness and trading giant Cargill Inc CARG.UL said on Tuesday quarterly earnings more than doubled, with all five of its business segments posting improved results from a year ago.

Minneapolis-based Cargill reported earnings from continuing operations of $729 million for the third quarter that ended February 28. The company also realized a $169 million net gain from discontinued operations due to the sale of its Brazilian poultry and pork business.

That brought net earnings to $898 million, compared with $326 million in the same period a year earlier.

"We were able to benefit from the faster pace of economic recovery occurring in emerging markets," Cargill Chief Executive Greg Page said in a statement, adding that in developed economies conditions were improving more slowly.

Cargill, one of the world's largest private corporations, employs 138,000 people in 67 countries. It is a leading U.S. grain exporter, biofuels producer, food processor, energy trader and majority owner of listed fertilizer maker Mosaic Co (MOS.N), a top producer of phosphates and potash.

"Our earnings were up from a weak quarter a year ago but it was broad-based as all five (business segments) improved their results," Cargill spokeswoman Lisa Clemens said.

"Cargill's performance was more optimistic than our earnings outlook," Kenneth Zaslow, an analyst with BMO Capital Markets, wrote in research update on Tuesday.

"There may be a potential that we are too cautious on our earnings outlook for ADM and BG (Bunge)," he said.

Cargill and its competitors Archer Daniels Midland Co (ADM.N) and Bunge Ltd (BG.N) are the world's top grain processors and leading exporters of grains, cotton and oilseed products.

BROAD-BASED RECOVERY

Among Cargill's five main business segments, earnings in agriculture services were lifted by the late but large North American grain harvest, the company said.

Results also improved in Cargill's crop origination and processing as well as food ingredients and applications.

Cargill's large risk management and financial business improved "alongside the recovery in global financial markets," although energy trading results "were not as strong as those afforded by last year's extremely volatile markets," it said.

Industrial business results received a boost from Cargill's salt business, as de-icing needs rose as winter storms blanketed many areas of North America, Cargill said.

Closely held Cargill also said without providing details that it "realized an increase in earnings" from its investment in Mosaic, one of the world's top fertilizer producers.

Cargill holds a 64 percent stake in Mosaic, according to SEC filings. The fertilizer producer provides one of the rare public avenues for glimpses into Cargill's ongoing operations.

Mosaic said on March 31 that third-quarter profits more than tripled, driven by improved demand for phosphate and potash. For the quarter that ended February 28, Mosaic posted profit of $222.6 million, or 50 cents per share, compared with $58.8 million, or 13 cents per share a year earlier.

During the quarter Cargill said it expanded or opened more processing facilities for corn in Uberlandia, Brazil; food ingredients in Wuhan, China; and sugar near Kakinada, India. It also began construction of a big new sugar refinery in Gramercy, Louisiana, and completed the purchase of certain assets of Robinson Steel in East Chicago, Indiana. The latter will increase Cargill's production of steel sheet and plate.

(Reporting by Christine Stebbins, editing by Matthew Lewis)

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