UPDATE 2-Cargill earnings hit by commodity market disruptions

Tue Apr 8, 2014 1:19pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

(Updates with comments from Cargill and analysts)

By Tom Polansek

CHICAGO, April 8 (Reuters) - Cargill Inc said on Tuesday its quarterly earnings fell 28 percent, making it one of the largest companies yet to demonstrate how big commodity market disruptions this year have hurt its bottom line.

Minneapolis-based Cargill, a top global commodities trader, was hit by a triple-whammy of unexpected events, including a surge in energy prices in January, rail backlogs, and the rejection of U.S. corn shipments by China.

The problems are likely to have also hit Cargill peers such as Archer Daniels Midland Co and Bunge Ltd, which are due to report financial results in the coming weeks.

The coldest winter in 30 years catapulted regional U.S. natural gas prices to record highs, while power markets gyrated as producers struggled to keep supplies flowing to consumers. The harsh weather also snarled rail transport for products as diverse as coal, grain and ethanol.

"In North America, we had record harvests and this extreme weather, so that created a backlog," Cargill spokeswoman Lisa Clemens said about the rail disruptions. "We couldn't move grain or deliver products as fast as we would otherwise."

Cargill, one of the world's largest privately held companies, reported net earnings of $319 million for the third quarter ended Feb. 28, down from $445 million a year earlier. Revenue was $32 billion, nearly even with a year earlier.

A trading loss in U.S. power markets was related to an "unprecedented price spike" in late January, Cargill said. It added that part of the loss has been recovered but provided no details.   Continued...