Archer Daniels Midland Company
's (
ADM
) adjusted earnings of 50 cents per share for the first-quarter
ended September 30, 2012, slipped nearly 14% from the year-ago
period's adjusted earnings of 58 cents primarily due to lower
sales and increased input and operational costs. However, the
quarterly earnings were above the Zacks Consensus Estimate of 44
cents per share.
On a reported basis, including a LIFO charge of 5 cents, asset
impairment charge of 16 cents and adverse impact from Brazil
income tax re-measurement, quarterly earnings plunged roughly 59%
to 28 cents per share from the prior-period earnings of 68 cents.
A LIFO credit of 11 cents is included in the prior-year quarters'
earnings.
Archer Daniels' quarterly net sales inched down 0.4% year over
year to $21,808 million, significantly below the Zacks Consensus
Estimate of $22,410 million. The year-over-year decline in net
sales was mainly attributable to weak performances at Corn
Processing and Agricultural Services segments, partially offset
by improved results at the company's Oilseeds Processing
segment.
Segment-wise, the company's Oilseeds Processing segment's
revenue increased 6.8% year over year to $9,688 million while
revenue at Corn Processing and Agricultural Services declined
5.1% and 5.8% to $3,126 million and $8,956 million,
respectively.
Operational Discussion
Archer Daniels reported total segment adjusted operating
profit of $644 million, down approximately 11% from the year-ago
quarter, primarily due to reduced operating income at the Corn
Processing and Agricultural Services segments, partially offset
by improved operating result at Oilseeds Processing segment.
On a segmental basis, adjusted operating profit for
Agricultural Services
segment declined $99 million to $224 million due to tight U.S.
crop supplies, which affected both export volumes and the U.S.
merchandising results.
Archer Daniels'
Corn Processing
segment's operating profit reflected a fall of $115 million to
$68 million in the first quarter. The decline was primarily
attributable to higher corn costs which were partially offset by
improved results of sweeteners and starches.
Oilseeds Processing
segment recorded third-quarter operating profit of $336 million
compared with an operating profit of $220 million in the year-ago
period. The $116 million increase was driven by strong
performance delivered by every category except Refining,
packaging, biodiesel and other category.
Operating profit from the
other business
segment came in at $16 million, up $21 million from the last year
quarter. The upside was driven by improvement in captive
insurance and better results at ADM Investor Services.
Financials
Archer Daniels ended the quarter with $1,235 million in cash
and cash equivalents compared with $1,320 million at the end of
prior-year quarter. At quarter-end, long-term debt was $6,815
million. Shareholder's equity as of September 30, 2012 was
$18,441 million.
Archer Daniels, which competes with
Bunge Limited
(
BG
) and
Tyson Foods Inc.
(
TSN
), currently has a Zacks #5 Rank, implying a short-term Strong
Sell rating on the stock.
Archer Daniels Midland procures, transports, stores,
processes, and merchandises agricultural commodities and products
in the United States and internationally. The company has three
major business segments: Oilseeds Processing, Corn Processing,
and Agricultural Services. Currently, Archer Daniels Midland has
30,000 workers around the world. It runs around 270 processing
plants and provides 420 crop procurement facilities.
ARCHER DANIELS (ADM): Free Stock Analysis
Report
BUNGE LTD (BG): Free Stock Analysis Report
TYSON FOODS A (TSN): Free Stock Analysis
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