April 30, 2008

ADM profit rises 42 percent on grain handling

Archer Daniels Midland Co., the world's largest grain processor, said third-quarter profit rose 42 percent, topping analyst estimates, as it increased commodity trading and soy crushing.

Net income climbed to US$517 million, or 80 cents a share, in the three months through March, from US$363 million, or 56 cents, a year earlier, ADM said.

Sales rose 64 percent to US$18.7 billion. The company was expected to earn 69 cents a share, the average estimate of seven analysts surveyed by Bloomberg.

ADM gained in pre-market trading as profit in its agricultural services unit, which stores grain and transports it to market, surged almost eightfold to US$366 million as rising demand sent wheat, soy and corn prices to records.

Volatile commodity markets are creating unprecedented profit opportunities, Chief Executive Officer Patricia Woertz said.

ADM should gain from favourable conditions, including a record corn crop last year, rising ethanol prices and volatile market conditions, JP Morgan Securities Inc. analysts led by Pablo Zuanic said in an April 25 report.

Zuanic rates the shares "overweight'' and had forecast profit excluding one-time items of 82 cents a share.

ADM rose 60 cents, or 1.3 percent, to US$48.02 as of 8:12 a.m. in trading before the official opening of the New York Stock Exchange. The shares climbed 22 percent in the year through yesterday.