February 5, 2008

Archer-Daniels reports 7-percent increase in profit

Archer-Daniel Midlands' fiscal second-quarter profit jumped 7 percent on-year as services for trading and transportation grain more than offset falling ethanol prices and a hefty inventory charge.

For the recent quarter, the Illinois-based agricultural products company said it earned US$473 million, or 73 cents a share, compared with US$441 million, or 67 cents a share last year.

The company said total net sales for the quarter rose 50 percent to US$16.5 billion from US$10.98 billion, primarily driven by sharp increase in commodity prices, such as for feed grains, wheat and corn.

Analysts polled by Thomson Financial expected, on average, fourth-quarter earnings of 74 cents a share on revenue of US$12.7 billion.

Corporate charges related to inventory valuations more than doubled to US$225 million in the recent quarter against US$107 million last year.

Company shares were down 1.4 percent in pre-market trading to US$44.88.

Archer-Daniels is the world's largest producer of corn-based ethanol.