DOW JONES NEWSWIRES
Archer Daniels Midland Co.'s (ADM) fiscal fourth-quarter
earnings fell 15% mostly on higher tax expenses as the company saw
earnings growth at most of its businesses.
The corn-processing unit was an exception as it was hit with
significantly higher commodities costs. Earnings in that division
fell 16% despite stronger volume. Sweetener and starches earnings
also declined as higher average selling prices and volume were
offset by higher corn costs.
Shares were off 5.6% to $28.78 premarket as adjusted earnings
fell well short of Street expectations. Through Monday's close, the
stock was up 1.3% this year.
The grain processor and merchandiser has posted strong profit
growth in recent quarters as tight global grain supplies and strong
demand for agricultural commodities have helped strengthen
prices.
For the quarter ended June 30, ADM reported a profit of $381
million, or 58 cents a share, down from $446 million, or 69 cents a
share, a year earlier. The latest quarter included 5 cents a share
in inventory-related credits, while the prior year included charges
of 2 cents a share. Revenue soared 45% to $22.87 billion.
Analysts polled by Thomson Reuters most recently forecast
earnings of 85 cents a share on revenue of $20.43 billion.
Gross margin fell to 4.8% from 5.9%.
It oilseeds processing business, its biggest segment, reported
operating earnings grew 5.6% amid stronger revenue, though volume
declined 2%. Agricultural services segment earnings rose 8.4% amid
stronger sales. The business handles and transports grain from farm
to market before it is processed into products such as cooking oil,
animal feed and sweeteners.
The company's effective tax rate was 50% compared with 19% a
year earlier.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com