Global commodities trader Cargill Inc effectively navigated tumbling commodities markets and volatile currencies to turn in a 20-percent gain in first-quarter profit, the privately held company said on Wednesday.
The Minnesota-based company's grain and oilseed supply chain and energy businesses were standouts in the quarter ended Aug. 31, in stark contrast with several rival agribusinesses that have struggled in the commodities market downturn.
Cargill reported net earnings of $512 million for the fiscal first quarter, compared with a profit of $425 million a year earlier. Revenue declined 17 percent to $27.5 billion from $33.3 billion.
"Our team ably navigated the quarter's weather-driven agricultural commodity markets, as well as the effects of more volatile emerging markets, currency fluctuations and other macroeconomic uncertainty," CEO David MacLennan said in a release.
Cargill's origination and processing unit, which buys, sells, stores and processes crops such as corn and soybeans, was its largest contributor in a quarter marked by falling prices and tepid global demand.
Soybean processing profit strengthened amid bumper crops in North and South America, Cargill said.
Archer Daniels Midland Co and Bunge Ltd, which along with Cargill and Dreyfus are known as the "ABCD companies" that dominate global grain trading, report results in the coming weeks.
Results were down in Cargill's animal nutrition and protein segment as high cattle and beef prices steered consumers to cheaper pork and poultry. The company sold its pork business to meat packer JBS SA this summer.
Cargill's food ingredients segment also posted lower quarterly results, pressured by weak profits in sweeteners and starches, which slumped amid historically low sugar prices, the company said.
Lower operating earnings after the closure of its hedge fund arm Black River Asset Management LLC this summer weighed on results in Cargill's industrial and financial services segment, only partly offsetting stronger returns in energy trading.