August 6, 2008

 

ADM's revenue up 78 percent but earnings drop 61 percent 

Archer Daniels Midland reported lower-than-expected quarterly profit Tuesday (Aug 5) even though its revenue increase exceeded expectations.

 

Earnings fell 61 percent to US$372 million, or 58 cents per share, in the fourth quarter ended on June 30 from US$954.8 million, or US$1.47 cents per share, a year earlier.

 

This was 10 cents below expectations of 68 cents a share, according to Reuters Estimates.

 

The year-earlier results included after-tax gains of 95 cents per share from asset sales.

 

Revenue rose 78 percent to US$21.78 billion from US$12.21 billion, beating Wall Street forecasts of US$15.36 billion, as grain prices hit record levels.

 

Corn processing profit rose 14 percent to US$262 million due to higher ethanol sales volume and higher prices for the company's sweeteners and starches.

 

The lower profits were despite a large increase in revenue. The former were due largely to profits from its sales of its interests in Chinese ventures and Agricore United a year ago.  

 

Oilseeds processing profit dropped 37 percent to US$375 million because of a year-earlier gain of US$440 million from the exchange of ADM's interest in Chinese ventures for shares in Wilmar International Ltd.

 

Agricultural services profit dropped 57 percent to US$106 million because of a year-earlier gain of US$153 million from the sale of Agricore United.

 

For fiscal 2008, ADM said its segment operating profit hit a record US$3.4 billion.

 

ADM shares have fallen 39 percent this year as fears rose that record corn prices would lower the company's earning potential, given its large exposure in ethanol production.