Agribusiness firm CHS Inc. reported first-quarter earnings that dropped 17.5 percent to $343.7 million on revenue that rose 20.6 percent to $11.7 billion.
CHS profit down, revenue up as some margins shrink
CHS said profit margins narrowed on agricultural and energy products.
March 21, 2013 at 9:34PM
The Inver Grove Heights-based firm, owned by 1,100 cooperatives and an additional 75,000 farmers, said its profit margins on agricultural and energy products dropped despite rising revenue.
The wide gap between the decline in earnings and the growth in revenue reflects that CHS "is in commodity-driven businesses that are very different from selling iPads with fixed margins," said spokeswoman Lani Jordan.
The biggest profit decline came in oil refining operations, which serve the domestic market, and to a lesser degree in agricultural commodities such as wheat and soybeans, sold on the world market, Jordan said.
Energy business operating profit dropped about 36.4 percent to $253 million, while the agricultural operating profit declined about 7.5 percent to $112.4 million.
"The U.S. demand for gasoline is falling, and gasoline is a lot of what comes out of our refineries," Jordan said.
The firm's agricultural business, which operates in 60 countries, had a decline in margins on grain, which includes corn and wheat, and oil seeds, which are soybeans, she said.
Steve Alexander • 612-673-4553
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