UPDATE 2-Cargill 3rd qtr profit up, company warns of tough markets
(Recasts with oversupplied grain markets in paragraph 1, adds industry details, analyst comment)
By Karl Plume
April 7 (Reuters) - U.S. agricultural commodities trader Cargill Inc on Thursday reported a rise in third-quarter profit on stronger results in food ingredients and grain handling but warned about headwinds from oversupplied grain markets and low commodity prices.
The privately held company is exiting lower-margin operations including its U.S. pork business and expanding deeper into food ingredients and aquaculture to capture higher margins and capitalize on consumer trends. It is also in the midst of a corporate restructuring.
The refocus has begun to add to the bottom line, according to Cargill. The company did not give a detailed earnings outlook.
Several years of expanding global production have sent world grain stocks to historic highs and dragged prices to near five-year lows.
"Barring weather events, we don't anticipate a near-term improvement in market conditions for agriculture. In these kinds of cycles, and we've been through them before, we focus on the levers under our control," Chief Executive David MacLennan said in a statement.
Although cheap grain allows Cargill and competitors including Archer Daniels Midland and Bunge Ltd to buy grain at lower prices for processing and export, low price volatility has hurt their grain trading units.
Cargill said net earnings rose 8 percent to $459 million for the fiscal quarter ended Feb. 29, from $425 million a year earlier. Revenue fell 11 percent to $25.2 billion. Continuación...