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Archer Daniels Midland Net Profit Up, Misses Expectations

CNBC.com
Tuesday, 1 May 2007 | 9:25 AM ET

Archer Daniels Midland, the largest U.S. food processor and ethanol maker, reported quarterly profit that fell far short of Wall Street expectations, sending its shares down sharply.

ADM said it had a challenging quarter, marked by lower earnings in agricultural services and oilseed processing.

Profit from agricultural services, which includes grain handling and storage, fell $38 million, or 48%, in the fiscal third quarter ended March 31 due to lower global merchandising and handling results.

Oilseed processing profit fell $8 million to $169 million due to lower crush margins and weaker biodiesel processing margins.

Higher ethanol and sweetener selling prices helped corn processing profit rise by $33 million to $252 million but the division faced higher corn costs.

ADM said earnings climbed 4% to $362.9 million, or 56 cents a share, compared with $347.8 million, or 53 cents a share, a year earlier. The earnings include a gain of $33 million from the sale of its Arkady food ingredient business.

Analysts were expecting earnings of 62 cents a share, according to Thomson Financial.

Revenue jumped 25% to $11.38 billion, compared with analysts forecasts for $10.01 billion, according to Reuters Estimates.

ADM has outperformed the food processing sector, fueled by strong demand for alternative fuels made from crops. ADM shares have risen 22% this year, compared with a 6.8% gain in the Dow Jones U.S. Food Producers Index, based on Monday's closing prices.

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