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Archer-Daniels-Midland Company Message Board

  • d8473572 d8473572 Feb 4, 2009 11:45 AM Flag


    DOW JONES NEWSWIRES Archer Daniels Midland Co.'s (ADM) fiscal second-quarter net income climbed 24% amid strong results in the agribusiness giant's oilseeds-processing and agricultural services, though profits plunged in its corn-processing business. Shares were up 2.6% at $28.20 in recent premarket trading. Archer Daniels cited a "significant decline" in ethanol margins amid sharply higher corn prices, on a year-to-year basis, and increased manufacturing costs. The economic slowdown and retreat in global commodity and energy prices from their peaks last summer, have led some companies in agribusiness to lower expectations including Bunge Ltd. (BG), the world's largest oilseed processor, and Corn Products International Inc. (CPO). Meanwhile, Archer Daniels has a more diverse portfolio and less exposure to the more volatile fertilizer markets. The company in November said was looking for other opportunities to expand its biofuels business in Brazil after announcing plans to enter the country's ethanol market. Archer Daniels had seen earnings boosted last year by its expanding biofuel footprint, though the ethanol economics in the U.S. have deteriorated. For the quarter ended Dec. 31, the world's largest grain processor by revenue and one of the largest producers of ethanol, posted net income of $585 million, or 91 cents a share, compared with $473 million, or 73 cents, year earlier. Revenue edged up 1.2% to $16.67 billion as higher selling prices, primarily due to year-over-year increases in commodity costs, were offset by decreased sales volumes. Analysts polled by Thomson Reuters expected earnings of 68 cents a share on revenue of $16.97 billion. Gross margin climbed to 7.27% from 5.75%. ADM's oilseeds-processing arm posted a profit increase of 46% due to improved results in all geographic regions, excluding South American fertilizer. Earnings at agricultural services were up 47% amid improved merchandising and handling. Profit in the corn-processing segment plunged 89% as amid a "significant decline" in ethanol margins due to sharply higher corn and increased manufacturing costs, lower selling prices and inventory write-downs. Shares closed Monday at $27.50 and weren't active in premarket trading. The stock has fallen by 44% since reaching a 52-week high of $48.95 last April.

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    • Making stronger ties with Brazil as a business partner is good for adm, Brazil and USA. It really is the best long term strategy.
      Agricultural industry will create more jobs in N and S America in the coming years, as growth in demand continues. The agricultural industry from Canada to Brazil is the growth sector in the coming decades. means jobs and gnp growth. I would not say the same thing for many other industries.

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