U.S. agribusiness Archer Daniels Midland on Tuesday reported higher quarterly earnings as a record-large U.S. harvest boosted grain volumes and supported strong exports, though revenue fell short of expectations.
Earnings in agricultural services, ADM's biggest business segment in terms of revenue, grew as bumper U.S. corn and soybean crops replenished thinned inventories of the crops that the Illinois-based company buys, sells, stores and processes.
Good oilseed crush margins in North America and Europe underpinned ADM's soybean processing results, but that was offset by slow farmer sales in South America.
Higher profits from ethanol underpinned corn processing results for ADM, one of the country's top producers of the corn-based biofuel, although rising grain costs in the quarter partly offset the gains.
The company warned of headwinds from deteriorating ethanol margins in 2015.
"While U.S. ethanol demand was seasonally strong, boosted by the domestic response to lower gasoline prices, high industry production has built excess inventories. Margins in this industry should remain challenged until supplies are better aligned with demand," Chief Executive Juan Luciano said.
ADM reported net earnings of $701 million, or $1.08 per share, in the quarter ended Dec. 31, up from $374 million, or 56 cents a share, a year earlier.
Excluding special items such as charges related to ADM's purchase of flavorings company Wild Flavors, earnings were $1.00 per share, up from 95 cents a year earlier and above the analysts' average estimate of 94 cents, according to Thomson Reuters I/B/E/S.
Revenue fell to $20.89 billion from $24.14 billion, missing the consensus expectation of $23.85 billion.