(Dow Jones) -- Cargill Inc. said revenue fell 10% in the latest quarter due to sliding beef prices and muted grain markets, though the agricultural giant's sale of its U.S. pork business and of its stake in a steel venture helped drive profit higher.
The suburban-Minneapolis conglomerate on Thursday reported declining profits across all four of its major divisions as results also suffered from the liquidation of some commodity-related hedge funds and slowing demand from some developing countries, though Cargill reported stronger profits from its animal-feed, soybean processing and chocolate-making businesses.
Cargill has been shaking up its vast portfolio, exiting some longtime businesses, such as U.S. pork processing, and placing big bets on other areas that it sees as future winners, like farm-raised salmon. Chief Executive David MacLennan also has trimmed the number of executives steering Cargill's strategy in an effort to make it nimbler in responding to shifts in commodity markets and consumer tastes.
Mr. MacLennan on Thursday said Cargill is making progress with its revamp. "It's fitting we take this action now, as we celebrate Cargill's 150th anniversary and position the company for success in the generations to come," he said.
Cargill reported $1.39 billion in net earnings for its fiscal second quarter, up from $784 million a year earlier. The $1.45 billion sale of its U.S. pork business and the $720 million sale of its interest in a steelmaking venture boosted profit.
After adjusting profits for the asset sales and a change in the way the company accounts for its business in Venezuela, due to problems converting the local currency to U.S. dollars, Cargill said operating earnings fell 13% from a year ago to $574 million.
Profits fell "moderately" in Cargill's grain-trading-and-processing division, the company said, mainly due to slower trade in Canadian grain after two straight years of bumper crops, along with weaker results from its cotton and sugar units. Food-ingredients earnings declined because of "recessionary conditions" and weakening currencies in some emerging markets that buy staple food products from Cargill. The warm start to winter in North America slowed road-salt sales.
A steep slide in U.S. beef prices and exports hit Cargill's U.S. cattle feedlot operations, while its Australian beef operations suffered from declining cattle supplies, offsetting brisk fish-feed sales in Latin America and contributing to a slight decrease in overall profits for the company's animal feed and meat division. Earnings fell "significantly" in Cargill's industrial and financial services division after some hedge funds were wound down and quiet energy markets offered few opportunities for profitable trading, Cargill said.