ADM 2Q earnings up on margins
earnings in its fiscal second quarter rose 20 per cent as improved
oilseed crushing margins amid tightening industry capacity helped
lift results.
Agribusiness giant Archer Daniels Midland Co. said on Wednesday earnings in its fiscal second quarter rose 20 per cent as improved oilseed crushing margins amid tightening industry capacity helped lift results.
The world's largest processor of soybeans, corn, wheat and cocoa said earnings in the period ended Dec. 31 rose to $150 million (€171m), or 23 cents a share, from $125 million (€142m), or 19 cents a share, a year earlier.
Revenue rose 12 per cent to $5.55 billion (€6.3bn), from $4.94 billion(€5.62bn),. Operating profit climbed 28 percent to $341 million(€388m), from $267 million (€303m), a year ago.
Results at the Decatur, Illinois-based company were in line with analysts' expectations of 18 cents to 29 cents a share in the quarter, with a consensus at 24 cents, according to Thomson Financial/First Call, which tracks results.
``The industry had been suffering from overcapacity,'' said Banc of America Securities analyst William Leach. "Some of the plants have been shut down so the crush margins improved in the quarter. The oversupply diminished and prices went up.''
ADM's improvement coincides with improved earnings at its big agri-business rivals, such as privately held Cargill Inc. and Bunge Ltd., both of which are benefiting from better agricultural trends.
Bunge posted nearly a five-fold gain in quarterly earnings Tuesday, helped in part by improved soybean margins. Minneapolis-based Cargill reported a 34 per cent earnings boost last week.
Offsetting some of the improvement in soybean processing were earnings from ADM's corn wet milling operations, which decreased amid weaker demand for ethanol, a corn-based bio-fuel, the company said.
"ADM's earnings from operations continue to improve as the fundamentals in many of our core business areas strengthen,'' Chief Executive G. Allen Andreas said in a statement. "We continue to improve our global infrastructure in these markets and adjust our capacities to maximize global efficiencies.''
Results in the quarter included a 2-cent-a-share loss from securities transactions and a 4-cent-a-share gain related to a partial settlement of antitrust litigation.
Shares of ADM were up 3 cents at $13.68 (€15.57) in early New York Stock Exchange trade. The stock, which has fallen nearly 5 per cent this year, has underperformed that Standard & Poor's 500 Index by nearly 3 per cent.
