Results down from previous year, but CEO says company can deliver strong full-year performance
Land O’Lakes Inc. reported quarterly net sales of $3.7 billion and net earnings of $113 million in the second quarter ending June 30, 2017, compared with net sales of $3.5 billion and net earnings of $134 million for same period in the prior year. Year-to-date net sales totaled $7.3 billion with net earnings of $223 million, compared with net sales of $7.1 billion and net earnings of $238 million for same period in the prior year. Year-to-date results include an unrealized hedging loss of $4 million as compared with an unrealized hedging gain of $26 million for the same period in 2016.
“As a company focused on growth, I am pleased with the first half of the year. We are up in volume in most of our key categories,” said Chris Policinski, Land O’Lakes president and CEO. “We continue to be in a position to deliver strong full-year performance.”
Earnings from Operations, excluding the impact of unrealized hedging gains and losses, were $262 million for the six months ended June 30, 2017, up 8 percent from 2016 levels. Results were driven by strong performance in the Crop Inputs and Animal Nutrition segments, partly offset by lower performance in Dairy Foods and investments in Land O’Lakes SUSTAIN. Earnings in Crop Inputs were driven by higher volumes in seed and crop protection products. The Animal Nutrition segment delivered higher margins and improved product mix, which more than offset a decline in livestock volumes. Dairy Foods benefited from higher margins on retail branded products, but overall margins were lower due to declines in global milk powder markets, which affected pricing.
The company continued its investment in facilities and growth in strategic markets. Purina Animal Nutrition opened a new facility in Caledonia, New York, to replace the plant destroyed by fire in November 2014. During the first quarter, Land O’Lakes announced the acquisition of Vermont Creamery to accelerate growth in its important Dairy Foods business with trusted brands and innovative products. The company also increased its commitment to achieve meaningful goals in and to shape the future of environmental sustainability in an announcement with Walmart.