January 13, 2009 / 2:42 PM / 11 years ago

UPDATE 2-Cargill quarterly earnings jump 25 pct

* Net $1.19 billion vs $954 million

* Earnings boosted by fertilizer giant Mosaic Co

* Energy trading helped gains in volatile markets (Adds Cargill comments, byline)

By Christine Stebbins

CHICAGO, Jan 13 (Reuters) - U.S. agribusiness and trading giant Cargill Inc [CARG.UL] reported a 25 percent jump in quarterly earnings on Tuesday thanks to its investment in the fertilizer industry through its holdings in Mosaic Co (MOS.N).

Minneapolis-based Cargill, one of the world’s largest private corporations, earned $1.19 billion in the fiscal second quarter that ended Nov. 30, up from $954 million a year earlier.

Excluding earnings from Mosaic, Cargill’s results were moderately below a year ago. Cargill holds a 64 percent stake in Mosaic, a top global producer of fertilizers.

But the company had strong earnings during a period of frozen credit markets and a huge retreat in energy and farm commodity prices.

“The global financial system was under significant stress, energy and agricultural commodity prices fell sharply, and recessionary risks took hold in developed economies in a worsening global economic environment,” Greg Page, Cargill’s chief executive, said in a statement.

Page said the company’s strong balance sheet allowed uninterrupted access to short-term credit markets.

Prior to the turn in the financial markets, “we had reduced our debt levels and put more of our debt into longer maturities,” Cargill spokeswoman Lisa Clemens told Reuters.


Cargill, which operates in 67 countries, is a leading U.S. grain exporter, a major producer of ethanol, a top energy trader, among many other businesses.

Earnings in two of its five general business segments increased — operations that buy and process farm commodities and operations in its industrial segment.

Agricultural services, food ingredients and applications, and risk-management and financial segments all earnings fell.

Cargill’s energy businesses, which includes trading and transportation of petroleum, natural gas, electric power and coal trading, surpassed last year’s second quarter earnings.

Cargill is preparing for 2009 by keeping costs and expenditures under control, and taking only the risks it chooses to take, Page said.

“We do not expect Cargill to be immune from the economic challenges in this environment,” he said. “We will keep our resources available to run the sourcing, processing, logistics, transport and risk management activities.”

Mosaic was one of Wall Street’s top performing stocks during the 2007-2008 commodity price boom.

Mosaic said on Jan. 5 it expects its results to be weak at least through the third quarter. Cargill does not comment on Mosaic’s outlooks or performance. (Reporting by Christine Stebbins; editing by John Wallace and Tim Dobbyn)

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