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ADM earnings for quarter drop 53 percent
Nov 04, 2009 (The Gazette - McClatchy-Tribune Information Services via COMTEX) --
Weakness in commodities markets hit Archer Daniels Midland in the company's third quarter, when earnings plunged 53 percent.
The food-processing giant, based in Decatur, Ill., reported an increase in profits from corn processing because of lower corn and manufacturing costs. But sales of ethanol, agricultural services and oilseed products fell sharply in response to lower commodity prices and slumping demand.
ADM reported a 29 percent drop in sales, to $14.9 billion.
Earnings per share attributable to ADM for the quarter were down 53 percent, to $496 million, or 77 cents per share.
ADM shares climbed $1.39, or 4.55 percent, on Tuesday to close at $31.91 per share on the New York Stock Exchange.
Chairman and CEO Patricia Woertz told Wall Street analysts that things appear to be leveling off. "Decline in demand for food, feed and fuel seems to be bottoming," she said of ADM's third quarter.
The results, despite the recession, were not as bad as Wall Street had expected, helping shares of ADM to rise for the day.
Thompson Reuters had forecast a profit of only 57 cents per share.
Corn processing profits increased $70 million, and profits from the sweetener and starch operations increased $129 million. Both improvements resulted from lower corn and manufacturing costs.
Sweetener selling prices also improved from the year-earlier quarter.
Operating profits plunged $253 million in the company's agricultural services operations, partly because of a drop in commodity prices that reduced the need for ADM-provided transportation.
ADM said it completed construction of a cogeneration facility in Clinton during the quarter that will provide steam and electricity to its corn processing complex, reducing reliance on Alliant Energy electricity.
ADM also began production at a new ethanol plant in Columbus, Neb., and at its first sugarcanebased ethanol plant in Brazil.
Five ships were acquired during the quarter, providing the company with 250,000 metric tons of cargo capacity.
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