Global commodities trader Cargill Inc [CARG.UL] on Tuesday reported a sharply higher adjusted quarterly profit led by strong results from its beef and turkey businesses and robust demand for North American grain and oilseed crops.
The privately held company said adjusted operating earnings jumped nearly 80 percent in the second quarter ended Nov. 30 to $1.03 billion, from $574 million in the same quarter a year earlier.
Quarterly net income including one-time items fell to $986 million from $1.39 billion a year earlier, when sales of Cargill's U.S. pork business and a steel mill bolstered results.
Revenue slipped to $26.9 billion from $27.3 billion in the same quarter a year ago.
Slumping commodity prices have created headwinds for agribusinesses like Cargill and rivals Archer Daniels Midland Co (ADM.N) and Bunge Ltd (BG.N). But input costs have also declined, allowing the companies to turn profits despite the downturn.
All four of Minnesota-based Cargill's business segments reported higher year-on-year results.
The company's animal nutrition and protein segment was the largest contributor to profit in the quarter as low grain feed costs helped boost livestock and poultry production and processing efficiency efforts lifted margins.
Seasonally strong demand for Thanksgiving holiday turkeys was met by greater available supplies of birds following tighter stocks in 2015 due to the U.S. outbreak of bird flu, Cargill said. Its beef business, meanwhile, gained from higher cattle supplies and strong consumer demand.
Cargill makes money buying, selling, storing, processing and exporting grains, benefiting from tight supplies in some markets and ample supplies in others.
Bumper grain and oilseed crops in the United States and Canada lifted earnings in Cargill's crop origination and processing business, more than offsetting a downturn in South America after adverse weather reduced crops in Brazil and Argentina.
Food ingredients and applications results rebounded from the prior year. The company's industrial and financial services segment recovered from a weak second quarter a year earlier on stronger energy, metals and transportation trading results.
(Reporting by Karl Plume in Chicago; Editing by Meredith Mazzilli)