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.
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