November 2, 2011
ADM's profits affected by high corn costs
Archer Daniels Midland Co.'s (ADM) quarterly net earnings increased from a year ago, but its profits were crushed by high corn costs and tight oilseed processing margins, the company said Tuesday (Nov 1).
For the fiscal first quarter that ended September 30, ADM reported a net profit of US$460 million, or US$0.68 per share, up from US$345 million, or US$0.54 a share, in the same quarter a year ago.
Adjusted to exclude inventory gains and one-time items, earnings per share were US$0.58.
Revenue rose to US$21.9 billion, from US$16.8 billion in the year-ago quarter.
Decatur, Illinois-based ADM, the world's largest corn processor and among the largest ethanol producers in the US, said soaring corn prices, which more than doubled from last year, dragged down profits in its corn processing segment.
The unit earned a net US$179 million, down 48% from the same quarter a year earlier despite processing volumes rising 5%.
ADM blamed weak crushing margins for a 28% decline in oilseed processing profit, which fell to US$221 million from US$308 million a year earlier.
The company's agricultural services segment, which buys, sells, stores and ships farm products, rebounded from a poor first quarter last year due to the restart of grain exports from the Black Sea region after a drought-related hiatus.
Profit more than doubled to US$244 million, from US$112 million a year ago, despite lower grain export volumes from the US.
ADM's other businesses, including cocoa processing and wheat milling, posted a net profit of US$55 million, reversing a loss of US$16 million a year ago.
Its shares closed on Monday at US$28.94 on the New York Stock Exchange, down 4.6%.