Cargill Inc.’s fiscal third-quarter profit jumped 33 percent, driven by its meat and animal nutrition business and a turnaround in its energy trading business.
The company benefited from a weak comparison to year-ago performance, when a wrong bet on energy futures yielded trading losses. Cargill never disclosed their precise size, but reports suggested they were in the tens of millions of dollars.
The Minnetonka-based food processor and provider of agribusiness services said it earned $425 million in the three months ended Feb. 28, up from $319 million in the same period a year ago.
Revenue was $28.4 billion, down 11 percent from $32 billion a year ago.
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The company, one of the largest privately owned firms in the world, has been contending with volatile conditions in all its main markets. In the U.S., crop prices plunged last year and livestock prices rose. But Cargill said its U.S. grain business steered the record crop to “robust” demand in other countries and “limited” output from South America.
Cargill’s animal nutrition and protein businesses made the biggest made the largest contribution to its latest profit, the company said. It cited strong performance in Australian beef processing, Central American poultry, and U.S. pork and turkey processing.
In early 2014, Cargill was on the wrong side of bets on electricity and natural gas trading at a time when the country endured one of the coldest winters in decades. Those losses shaped the company’s bottom-line results.
This quarter, David MacLennan, the company’s chief executive said in a statement, “In volatile petroleum markets, we saw a rebound in our energy businesses, having gained momentum from strategic changes made in the prior fiscal year.”
Cargill said its energy traders “successfully navigated the dramatic decline in global crude oil prices and the volatility in petroleum markets that followed.”
The company said it was faring well through the dramatic contraction of another major commodity – steel. Though a relatively small business inside Cargill, the company operates eight steel processing centers and said it was well positioned to provide just-in-time deliveries in a market in which steel consumption is falling.