--Results fall below expectations after record 2011
--U.S. drought impact yet to be felt
--Agricultural services only segment to report higher
fourth-quarter profit
(Adds segment detail in the fourth through ninth
paragraphs.)
By Doug Cameron
Cargill Inc. reported an 82% slide in fiscal fourth-quarter
profit, citing tough trading conditions in beef and soybean
processing and an economic and political environment that the
agribusiness group has said distorts the pricing of risk.
The largest privately held U.S. company in terms of revenue said
the quarterly results fell short of its expectations, though a
third of its sprawling operations--ranging from grain and energy
trading to financial services and steelmaking--delivered record
annual earnings.
"We did not trade as well in this year's markets, which were
driven as much by the economic and political environment as by the
fundamentals," said Chief Executive Greg Page in a statement.
Last December, Cargill disclosed plans to cut 2,000 jobs--1.5%
of its global workforce--and said Thursday that it trimmed more
than $400 million in expenses over the year.
Earnings from continuing operations slid to $73 million in the
quarter ended May 31 from $404 million a year earlier, with revenue
down 2% at $34 billion. Full-year profit fell to $1.17 billion from
the record $2.69 billion earned in fiscal 2011.
Cargill's global meatpacking, grain processing and food business
is viewed as an industry bellwether alongside rivals such as Archer
Daniels Midland Co. (ADM) and Bunge Ltd. (BG), though the effect of
the historic U.S. drought won't show up until it reports fiscal
first-quarter earnings.
Food ingredients and applications were the largest contributor
to Cargill's earnings during the year and the latest quarter, the
company said, though down from a year ago in the three months to
May 31.
Earnings from origination and processing were down
"significantly" in the latest quarter, while those from risk
management and financial services also declined.
The agricultural-services business reported higher quarterly
earnings, though the segment was "modestly" lower than a year
ago.
Write to Doug Cameron at doug.cameron@dowjones.com.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires