By Angela Chen
Archer Daniels Midland Co. said its earnings fell more than
expected in the second quarter, as record ethanol production
limited profits.
The Chicago-based company buys oilseeds, grains and other
commodities from farmers to make into ingredients that it then
sells to food producers. ADM has sought to focus more on
higher-margin businesses, such as specialty ingredients and
flavorings. In December, the company agreed to sell its global
cocoa business to Olam International Ltd. as it exits the volatile
cocoa sector.
"In corn, domestic and export demand for ethanol was robust, but
record industry production limited margins. This was partially
offset by strong results from our corn sweeteners and starches
business," said Chief Executive Juan Luciano.
Profit for the company's corn-processing business fell to $204
million from $338 million a year earlier.
Mr. Luciano added that the oilseeds segment had performed
well.
ADM's oilseeds-processing business reported an operating profit
of $344 million, up from $280 million.
However, the agricultural services segment was hurt by "lower
margins and volumes of North American exports, as they were less
competitive globally, and by a sharp upward move in commodity
prices at the end of the quarter," he said. Agricultural services
operating profit fell to $152 million from $184 million.
Overall, the company posted earnings of $386 million, or 62
cents a share, down from $533 million, or 81 cents a share, a year
earlier.
Excluding special items, per-share earnings were 60 cents, down
from 79 cents a year ago.
Revenue fell to $17.19 billion from $21.49 billion.
Analysts had projected per-share earnings of 66 cents and
revenue of $20.87 billion.
Shares, inactive premarket, have fallen 8% this year through
Monday's close.
Write to Angela Chen at angela.chen@wsj.com
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