UPDATE 1-ADM earnings miss expectations; grain trading seen weak

(Updates with details on earnings, analyst comments)

April 29 (Reuters) - Agribusiness company Archer Daniels Midland Co on Tuesday reported lower-than-expected quarterly earnings as poor margins and harsh U.S. weather hurt its core grain-trading business.

Illinois-based ADM said its grain trading business was stuck in a "low-margin environment" during the first quarter after weakness in the agricultural services unit contributed to a 27 percent loss in fourth-quarter earnings.

The miss disappointed investors who have been hoping that massive U.S. harvests would boost the profits of agricultural trading houses like ADM and Bunge Ltd. ADM shares were down 1.1 percent in pre-market trading.

"Our ag services business again generated weak results due to a low-margin environment as well as logistics and weather challenges in the U.S." Chief Executive Patricia Woertz said.

ADM, one of the world's biggest grain traders, reported net earnings for the quarter ended March 31 of $267 million, or 40 cents per share, down from $269 million, or 41 cents, a year earlier. Adjusted earnings were 55 cents per share, up from 46 cents a year ago. Analysts had expected 74 cents, according to Thomson Reuters I/B/E/S.

Revenue was $20.7 billion, down from $21.7 billion a year earlier and below analysts' estimates for $22 billion.

The decline comes after rival Cargill Inc reported that commodity market disruptions, including severe winter weather, contributed to a 28 percent decline in earnings.

ADM, Bunge, Cargill and Louis Dreyfus Corp comprise a group of companies known as the "ABCD" that control the flow of agricultural commodities around the globe.

Weak results in ADM's agricultural services division came after the company earlier said it had sold fertilizer operations in South America, was seeking a buyer for its chocolate business and was taking full ownership of grain trader Alfred C. Toepfer International. The moves were seen as an attempt to refocus on grain trading.

The company reported a $65 million charge for the timing effects of corn hedges and a $24 million charge for the timing effects of cocoa hedges. Still, margins for cocoa were seen to be improving.

ADM called the ethanol market "robust" and reported a quarterly profit of $196 million for its corn processing unit, up from $153 million a year ago.

(Reporting by Tom Polansek, Editing by Franklin Paul and Alden Bentley)