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Archer Daniels Midland (ADM)
Q1 2011 Earnings Call
November 02, 2010 9:00 am ET
Dwight Grimestad - Vice President of Investor Relations
John Rice - Vice Chairman, Executive Vice President of Commercial & Production and Member of Strategic Planning Committee
Patricia Woertz - Executive Chairman, Chief Executive Officer, President and Chairman of Executive Committee
Steven Mills - Chief Financial Officer, Senior Executive Vice President of Performance & Growth and Member of Strategic Planning Committee
Ryan Oksenhendler - BofA Merrill Lynch
Diane Geissler - Credit Agricole Securities (USA) Inc.
Christina McGlone - Deutsche Bank AG
Vincent Andrews - Morgan Stanley
Robert Moskow - Crédit Suisse AG
Kenneth Zaslow - BMO Capital Markets U.S.
Ian Horowitz - Soleil
Christine McCracken - Cleveland Research
Previous Statements by ADM
» Archer Daniels Midland F4Q10 (Qtr End 06/30/2010) Earnings Call Transcript
» Archer Daniels Midland Q3 2010 Earnings Call Transcript
» Archer Daniels Midland Company F2Q10 (Qtr End 12/31/09) Earnings Call Transcript
Thank you, Onica. Good morning, and welcome to ADM's First Quarter Earnings Conference Call. Before we begin, I would like to remind you that we are webcasting this presentation on our website, adm.com. The replay will also be available at that address.
For those following the presentation, please turn to Slide 2, the company's Safe Harbor statement, which says that some of our comments constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Statements are based on many assumptions and factors, including availability and prices of raw materials, market conditions, operating efficiencies, access to capital and actions of government. Any changes in such assumptions or factors could produce significantly different results. To the extent permitted under applicable law, the company assumes no obligation to update any forward-looking statements as a result of new information or future events.
Slide 3 lists the matters we will discuss in our conference call today. I will now turn the call over to Chairman and Chief Executive Officer, Pat Woertz. Pat?
Thank you, Dwight, and good morning, everyone. I'm turning to Slide 4. I'll begin, as always, with safety. During the first quarter of our fiscal year, we reduced lost workday injury rate by 27% and total recordable injury rate by 14% compared to the fiscal 2010. As we focus on personnel safety, we are also making improvements in total process safety. This is the approach we take to help minimize the risk of major incidents at our facilities. In 2010, we issued new total process safety guidelines to ensure that production equipment and controls are designed and installed, operated and inspected, tested and maintained, so that process incidents do not occur.
Turning to our financial results. This morning, we reported quarterly net earnings of $345 million or $0.54 per share, including a LIFO charge of $0.12 per share. Steve will discuss LIFO and some unusual items in a moment as he reviews the quarter.
The ADM team performed solidly in both corn and oilseeds with both businesses well positioned to meet demand. Agricultural Services results were impacted by crop supply shift early in the quarter.
On our last call, we announced our intention to grow oilseeds crush volume by 7% to 10% on a compound annual basis. As we pursue that goal, we are pleased to announce today that we are constructing a second biodiesel facility in Brazil to complement our existing facility in Rondonopolis. The new facility will be adjacent to our soybean crush plant and oil refinery in Joaçaba, Santa Catarina and will have a capacity of 164,000 metric tons per year. Construction will begin in 2011 and expected to be complete in 2012. The plant will be the only biodiesel facility in Santa Catarina and will help to meet Brazilian governments' B5 mandate. As we continue to invest in growth, we are also pursuing opportunities to enhance our storage and handling capacity both in the U.S. and globally.
Also in this quarter, actually in the current quarter, last Thursday, we announced the realignment of our senior leadership and its support of our commitment to growth, growing earnings, growing shareholder value. We named John Rice Vice Chairman. John will focus on extracting value from existing assets and he will continue to lead Commercial and Production. We also named Steve Mills Senior Executive Vice President of Performance and Growth, and Steve will work to accelerate and enhance value from new investments. And Ray Young will be joining our team as the Senior Vice President. He will assume the role of CFO on December 1. Ray brings the breadths of operational and financial experience in both mature and emerging markets particularly Brazil and China, and he also brings the passion for growth and improvement that will be important as we move ahead. We have a great team that's focused and we're excited by the challenge.
As we look at markets today, global demand is generally strong. This presents ADM with the opportunity to grow shareholder value by doing what we do best: use our assets and our acumen to connect crops from regions where they're available to markets where they're needed.
Now I'll hand the call over to Steve who will review our segment results. Steve?
Thanks, Pat, and good morning, everyone. If you turn to Slide 5 please, where Slide 5 lists our financial highlights for the quarter. Segment operating profit was $765 million, down $9 million from a year ago. In a moment, I'll review our results on a segment-by-segment basis.