Archer Daniels Midland Q2 Profit Falls Amid Record Ethanol Production

(RTTNews) - Grain processor Archer Daniels Midland Co. (ADM) Tuesday said its second-quarter profit declined from the prior year, amid lower revenues. The company noted that domestic and export demand for ethanol was robust, but record industry production limited margins.

Net earnings attributable to the company decreased to $386 million from last year's $533 million. Earnings per share dropped to $0.62 from $0.81 in the same quarter last year.

Adjusted earnings per share were $0.60, while it totaled $0.79 in the same period last year.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

The latest adjusted earnings per share excluded $0.11 of gains on asset sales and acquisition-related revaluations, $0.06 of LIFO charges, $0.04 of charges related to asset impairments and restructurings, and a $0.01 gain related to effective tax rate adjustment.

Revenues for the quarter dropped to $17.186 billion from $21.494 billion last year. Wall Street analysts were looking for revenue of $20.87 billion for the quarter.

Revenue from Agricultural Services fell to $7.01 billion from $9.23 billion in the prior year, and earnings declined amid lower margins and volumes of North American exports as well as a sharp upward move in commodity prices at the end of the quarter.

Corn Processing revenues dropped to $2.579 billion from $3.219 billion, and profit also was lower. The company noted that domestic and export demand for ethanol was robust, but record industry production limited margins. This was partially offset by strong results from corn sweeteners and starches business.

Oilseeds Processing revenues totaled $6.822 billion, down from $8.680 billion in the prior year. However, profit improved slightly amid strong soybean meal demand, combined with ample global bean supplies, supported strong global soy crush results.

Oilseeds volumes improved to 8.438 million metric tonnes from 7.785 million metric tonnes.

Meanwhile, corn volumes fell to 5.709 million metric tonnes from 6.336 million metric tonnes.

ADM Chief Executive Officer Juan Luciano said, "Our second-quarter results demonstrate the strength and value of our geographic and business-portfolio diversity...We've continued to advance our strategic plan that's improving our ROIC and growing our EVA."

ADM, which closed up 0.6 percent on Monday at $47.70, fell just over 2 percent in pre-market activity.