Grain processor Archer Daniels Midland Co. (ADM) on Tuesday said profit in the fourth quarter fell over 25 percent from last year, as revenues were little changed amid lower U.S. merchandising results, a decline in U.S. crop supplies and negative ethanol margins.
ADM Chairman and CEO Patricia Woertz said, ''In a challenging fourth quarter, solid results from our global oilseeds business, particularly in South America, were more than offset by negative U.S. ethanol margins and weaker U.S. merchandising results."
Net earnings attributable to the company declined to $284 million or $0.43 per share from $381 million or $0.58 per share a year earlier. Excluding a LIFO credit of $0.05 per share, adjusted earnings per share dropped to $0.38 from $0.69 last year.
On average, 10 analysts polled by Thomson Reuters expected earnings per share of $0.60 for the quarter. Analysts' estimates typically exclude one-time items.
Net sales and other operating income were $22.68 billion, slightly lower than $22.87 billion generated last year. Analysts estimated revenues of $21.75 billion for the quarter.
Segment operating profit fell to $544 million from $921 million.
In the quarter, Oilseeds processing generated $9.66 billion, up 4 percent from last year. The segment's operating profit declined, amid lower North American softseeds crushing margins, the absence of last year's favorable mark-to-market timing effects in Europe and weaker bio-diesel results from Europe.
Corn Processing results decreased from last year as negative ethanol margins more than offset improved results from sweeteners and starches.
In Agricultural Services, net sales and other operating income dropped over 5 percent to $10.15 billion and operating profit fell sharply. Merchandising and handling earnings were hit by lower U.S. merchandising results and a decline in U.S. crop supplies, which reduced North American export volumes.
For the full year, net earnings attributable to the company plunged to $1.223 billion from $2.036 billion. Earnings per share declined to $1.84 from $3.13. Net sales and other operating income improved to $89.04 billion from $80.68 billion in the previous year. Wall Street expected earnings of $2.47 on revenues of $88.15 billion.
Noting that drought has reduced the potential size of the U.S. corn crop, ADM said crop carryout are expected to be low in the U.S.
ADM, which settled at $27.49 on Monday, is losing 5.8 percent in pre-market trading.
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