Profit drop causes S&P to lower Cargill credit outlook

Standard & Poor's on Wednesday revised its credit outlook on Cargill from "stable" to "negative" after the agribusiness giant posted lower-than-expected annual profit.

Last week, Minnetonka-based Cargill announced fiscal 2012 earnings of $1.17 billion, down 56 percent over a year ago and its lowest annual profit since 2003. The results stem from weakness in several of its businesses, including beef processing, grain trading and cotton and sugar merchandising.

"The outlook revision reflects our belief that Cargill's earnings and credit measures, which were weaker than we expected for 2012, may not improve enough to restore credit measures to levels that we expect for the current ratings," S&P analyst Chris Johnson wrote in a research note.

S&P continues to rate Cargill's long-term debt "A," its third-highest rating, one denoting a company has a "strong capacity to meet financial commitments." While Cargill is privately owned, it has some publicly traded debt.