Leading food processing company
Archer Daniels Midland Company's
(
ADM
) third-quarter 2012 earnings per share of 78 cents beat the Zacks
Consensus Estimate of 60 cents and was down 12% from the year-ago
earnings of 89 cents per share. The increase was mainly driven by
better performance at its Corn Processing and Agricultural Services
segments.
On a year-over-year basis, earnings declined due to weak
margins, particularly in ethanol and European oilseeds; and lower
segment operating profit, slightly offset by lower corporate
expenses.
On a reported basis, including a LIFO charge of 10 cents,
restructuring costs of 8 cents and other adjustments, quarterly
earnings were down roughly 31% to 60 cents per share from the
prior-period earnings of 86 cents per share.
Quarterly Details
Archer Daniels' quarterly net sales surged 5.4% year over year
to $21,155 million, but below the Zacks Consensus Estimate of
$21,333 million. The year-over-year growth in net sales was mainly
attributable to a 15.1% increase in Corn Processing revenues to
$2,835 million and 14.4% rise in Oilseeds Processing revenues to
$7,044 million, marginally offset by a 0.5% decline in Agricultural
Services to $9,825 million.
The company reported total segment operating profit of $887
million, down 12% from the year-ago quarter.
On a segmental basis, operating profit for
Agricultural Services
segment increased $8 million to $179 million due to good volumes
and margins at ADM's Black Sea and other international
merchandising operations and increased earnings from transportation
services, offset by lower U.S. export volumes and flat
Merchandising and handling earnings.
Archer Daniels'
Corn Processing
segment's operating profit reflected a fall of $74 million to $130
million in the third quarter. The decline was attributed to better
sweeteners and starches operating profit more than offset by weak
ethanol margins.
Oilseeds Processing
segment recorded third-quarter operating profit of $395 million
compared with an operating profit of $512 million in the year-ago
period. The $117 million decline was primarily due to the continued
global weakness in oilseeds processing margins.
Operating profit from the
other business
segment came in at $183 million, up $64 million from last year.
Archer Daniels, which competes with
Bunge Limited
(
BG
) and
Corn Products International Inc.
(
CPO
), currently has a Zacks #3 Rank, implying a short-term Hold rating
on the stock. The company retains a long-term Underperform
recommendation.
ARCHER DANIELS (
ADM
): Free Stock Analysis Report
BUNGE LTD (
BG
): Free Stock Analysis Report
CORN PROD INTL (
CPO
): Free Stock Analysis Report
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