A perfect (snow) storm of unfortunate variables created a drop in profits for Cargill, with fiscal third-quarter earnings falling by 28 percent.
Bloomberg News reports harsh weather disrupted North American operations for the Minnesota-based agribusiness giant, and weather-related slowdowns and disruptions of train service also cut into earnings.
The Star Tribune added the company was also hit by a major loss in power trading and negative developments in Chinese corn shipments. Cargill had to pay a penalty on vessels hauling the grain to China and reroute other ships. The Chinese government has recently banned the import of corn varieties produced with certain genetically-engineered traits.
Cargill Tuesday reported net earnings of $319 million for the three months ending Feb. 28, compared to $445 million in the same period a year ago. Third-quarter revenues were $32 billion, essentially even with a year ago. The Business Journal noted that nine months into its fiscal year, earnings at Cargill are down 21 percent, from $1.83 billion last year to $1.45 billion this year.
"External events affected our quarterly results even as we saw operational improvements in key businesses,” CEO and President David MacLennan said in a press release from the company. "Despite one of the worst winters on record, we reliably delivered a near-record tonnage of road salt and deicing products to our customers across North America’s snow belt,” he added.
The statement emphasized that third-quarter earnings rose in Cargill's Animal Nutrition & Protein segment. The release went on to cite international growth, noting the addition of new facilities in Brazil, India and Belgium.