Archer Daniels Midland Company
) posted adjusted earnings of 95 cents per share for
fourth-quarter 2013, way ahead of the Zacks Consensus Estimate of
84 cents and 58.3% higher than the year-ago comparable quarter's
adjusted earnings of 60 cents. The company's fourth-quarter
results gained from robust operating performance at its Corn and
Oilseeds Processing businesses, offset by diminished profits at
the Agricultural Services segment.
On a reported basis, including GrainCorp and Brazilian sugar mill
related charges and other impairment charges, the company posted
earnings of 56 cents per share, substantially below 77 cents
earned in the prior-year quarter.
Archer Daniels' quarterly net sales dropped nearly 3.1% year over
year to $24,143 million and missed the Zacks Consensus Estimate
of $24,923 million.
Segment-wise, the company's Corn Processing revenues grew by a
marginal 0.5% to $3,055 million on account of lower corn costs
and improved ethanol margins. Archer Daniels' Oilseeds Processing
segment revenues decreased 2.1% year over year to $8,188 million,
Agricultural Services segment witnessed a decline of 5.8% to
Full-Year 2013 Synopsis
For fiscal 2013, the company reported adjusted earnings per share
of $2.33, above the Zacks Consensus Estimate of $2.23 and the
prior-year earnings of $2.30. Net sales for the year totaled
$89,804 million, a marginal year-over-year dip of 0.8% and short
of the Zacks Consensus Estimate of $90,448 million.
Q4 Operational Discussion
Archer Daniels reported adjusted segment operating profit of
$1,016 million, an improvement of 33.3% from the year-ago
quarter, driven by robust performance at the Oilseeds and Corn
processing segments, offset by weak performance at the
Agricultural Services segment.
On a segmental basis, the
segment recorded an operating profit of $478 million compared
with $411 million in the year-ago period. The $67 million
improvement resulted from efficient fulfillment of the robust
global demand for meal and superior biodiesel results in North
America and Europe.
segment registered a whopping $296 million increase in operating
profit to $315 million from the year-ago quarter. The increase
was primarily attributable to healthier market conditions as corn
costs witnessed a dramatic improvement along with solid seasonal
demand and improved ethanol margins owing to the robust domestic
and international demand.
Operating profit for the
segment rose 21.3% to $201 million as merchandising and handling
remained weak due to a slow farmer-selling of corn and challenges
in international merchandising, offset by strong performance at
the milling and other business. Transportation remained flat
during the quarter.
segment posted operating profit of $22 million, down from $77
million reported in the prior-year quarter.
Archer Daniels ended fiscal 2013 with $3,121 million in cash and
cash equivalents compared with $1,714 million at the end of the
prior year. At year-end, long-term debt including current
maturities was $6,512 million, down $212 million from a debt of
$6,724 million at the end of fiscal 2012.
Shareholders' equity as of Dec 31, 2013 was $20,154 million.
Moreover, the company displayed vigilance in capital spending
during the quarter and came up with a balanced capital plan for
During the fourth quarter, the company declared a 26% rise in its
dividend and laid out a plan to buyback 18 million shares by the
end of 2014 as part of its balanced capital allocation strategy.
Per the strategy, the company intends to return about $1.4
billion to shareholders in the form of dividend and share
repurchases and plow back $1.4 billion into the business in the
form of capital spending and small M&As in 2014.
Other Stocks Worth Considering
Archer Daniels currently carries a Zacks Rank #1 (Strong Buy).
Other stocks performing well in the agricultural products
Gruma S.A.B. de CV
ConAgra Foods Inc.
). Of these, Gruma carries a Zacks Rank #1 (Strong Buy), while
Bunge and ConAgra have a Zacks Rank #2 (Buy).
ARCHER DANIELS (ADM): Free Stock Analysis
BUNGE LTD (BG): Free Stock Analysis Report
CONAGRA FOODS (CAG): Free Stock Analysis
GRUMA SA-ADR B (GMK): Free Stock Analysis
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