Arden Hills, Minn. — Land O’Lakes Inc.’s net earnings were off 30 percent for the second quarter ending June 30, 2012, though sales edged up. Second-quarter earnings were $47.2 million on sales of $3.6 billion, down from the year-ago $67.6 million on sales of $3.47 billion. Lower quarterly and first-half earnings were attributable to the overall economic environment, declining markets, and excess milk supplies, which impacted the Dairy Foods business. These factors were partially offset by exceptionally strong earnings in the Crop Inputs business, with the segment’s WinField Solutions benefiting from the early spring and favorable early growing conditions. "Earnings across business units are mixed as we face continuing challenges from the struggling national economy and volatile markets," said President and CEO Chris Policinski. "We are addressing these challenges by focusing on growing revenues, reducing costs, improving efficiencies, and streamlining processes as part of our company-wide initiative called Total Margin Management." Six-month earnings were $132 million on sales of $7.46 billion, down from the year-ago $168.8 million on sales of $6.93 billion. In core businesses, first-half sales were up 15 percent in Crop Inputs, 11 percent in Feed, and 17 percent in Layers, while Dairy Foods sales were down 7 percent, primarily because of market conditions. LOL said it is committed to balancing the near-term investment requirements of growth with the long-term objective of maintaining a strong balance sheet. Total debt as of June 30, 2012, was $1.38 billion, up $0.32 billion from the same date one year ago. It said the increase was due to several acquisitions that are now generating additional cash flow, as well as higher working capital needs related to growth and increased commodity prices.
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