ADM earnings drop on weak ethanol, oilseed markets
Source: By Tom Polansek, Reuters • Posted: Wednesday, May 2, 2012
ADM, one of the world’s top grain traders and processors, is one of four large players that dominate business in agricultural markets. The others are Bunge Ltd (BG.N), Cargill Inc CARG.UL and Louis Dreyfus.
Decatur, Illinois-based ADM has been seeking to cut costs to stay competitive with its rivals, with the sector feeling broad pressure from volatile global markets and poor margins for soy crushing.
“This quarter, we delivered very good results despite difficult margin environments, particularly in ethanol and European oilseeds,” ADM Chief Executive Patricia Woertz said.
The company reported fiscal third-quarter earnings of $399 million, or 60 cents a share, down from $578 million, or 86 cents a share, a year earlier.
Excluding restructuring costs and other adjustments, profit was 78 cents per share.
That beat analysts’ average forecast of 59 cents a share, according to Thomson Reuters I/B/E/S.
Oilseed processing profit fell 23 percent to $395 million.
Corn processing profit dropped 36 percent to $130 million. Ethanol margins remained weak “amid excess industry production that lessened through the quarter,” ADM said.