Cooperative CHS Releases Earnings

The nations largest Ag Cooperative, CHS, has released earning for the 3 and 6 months ending 2/28/2019. CHS, being a coop, does not have common stock outstanding.

The company has 5 perpetual preferred issues outstanding so these results may be meaningful to some of us who either do (or did) own some of these shares which have always traded strongly.

CHS had earnings of $249 for the most recent 3 month period and $596 million for the 6 month period ending 2/28/2019.

While the headline earnings numbers look good, the profits all came from the companies energy business, which is primarily refining and marketing crude oil products.

The companies revenues are dominated by the ag segment with revenue of $11.3 billion with energy contributing revenue of $3.9 billion. This is about 3% lower (in total) than a year ago.

In the future, who knows when, the air will go out of the energy balloon and if the ag economy remains soft there could be problems with CHS. Regardless the company is strong and it would take many more years of a soft ag economy to hurt the company to the point of preferred holders needing to worry.

The companies press release is here.

The 10Q filed with the SEC is here.

6 thoughts on “Cooperative CHS Releases Earnings”

  1. I sold all my CHSCL and CHSCN this week. The run-up from my entry price covers far more than a year their dividend so I decided to lock down some gains. I’m doing this for many other preferreds too have have experienced sharp rises which I believe are starting to be overpriced. I plan on kicking back with a lot of cash and wait for the next correction. In the meantime I am putting in GABBX.

    1. GABBX ? Really ?

      May I ask why ? This fund gets one star from morninstar and has a very high expense ratio of 2%. Seems like a poor choice to me but maybe I’m not seeing something. I do see hat it has lost over 20% of its value over the last five years. Maybe you were just joking but I’m willing to learn.

      1. Retired,

        That was one of the typos I wanted to correct. It should have been GABXX but glad you caught it too.

  2. I”m hoping for a good US trade deal with China. It would be a lot of help for the ag segment of CHS.

    1. May I remind you, that the USMCA with Mexico and Canada has yet to be taken up by the Senate yet. As a Florida voter, my senator Marco Rubio who is hardly a Republican rebel is get opposed the agreement as currently drawn up as it hurts US growers. Was I surprised by this? Very surprised

      It’s okay to hope but these things take time and it’s the same team that negotiated the USMC.

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