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News 228 views last update:6 Aug 2012

Good second quarter for Cargill

Cargill Inc.'s earnings increased 25% in the quarter ending Nov. 30, driven by the company's investment in fertilizer company Mosaic Co.

The results capped the company's best year ever, even as farm prices decreased, along with the global economy, contributing to the most volatile commodity market in years.

Being the largest private company in the US in terms of revenue, Cargill has wide-ranging interests, buying and selling wheat and corn, chartering cargo ships and structuring complex derivative investments for hedge funds.

This diversity gives the company an unusually detailed view of the industries it bets on, as well as the ability to trade on its knowledge in ways few others can match.

Minnetonka-based Cargill posted net earnings of $1.19 billion for the quarter ended Nov. 30, up from $954 million in the comparable period last year.

However, excluding the company's investment in Mosaic's fertilizer business, Cargill's earnings were down slightly.

The privately held firm did not release its second-quarter revenue figures.

Solid performance
"Cargill performed solidly in a period like no other," Chairman and CEO Greg Page said in a statement.

"The global financial system was under significant stress, energy and agricultural commodity prices fell sharply, and recessionary risks took hold in developed economies in a worsening global economic environment.

"Because of Cargill's focus on market fundamentals and risk management, we were able to work our way safely through exceedingly volatile conditions."

Cargill's origination and processing segment and its industrial segment both saw significant earnings increases in the second quarter.

The company's agricultural services, food ingredients and applications, and risk-management and financial segments all reported losses.

Looking forward, Page said, "We do not expect Cargill to be immune from the economic challenges in this environment, but the essential nature of many of our products and services, the diversity of our businesses and our financial discipline should lend resilience to our operations."

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