ADM’s net earnings fall by 30 per cent
Archer-Daniels-Midland Company yesterday reported that its fiscal first-quarter net earnings fell 30 per cent from $496 million a year ago to $345 million. However, revenue rose to $16.8 billion, up from $14.92 billion a year earlier.
Net earnings for the first quarter decreased $151 million due primarily to a $9 million pretax decrease in segment operating profit and a $124 million after-tax negative variance from changing LIFO inventory valuations. The company’s effective income tax rate for the quarter was 26%, compared to 31% for the prior first quarter, mostly due to changes in the geographic mix of earnings.
“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 shifts early in the quarter. As we look at markets today, global demand is generally strong,” said ADM Chairman and CEO Patricia Woertz. “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.”
Oilseeds operating profit increased $24 million for the quarter, to a profit of $308 million. Crushing and origination results increased $41 million to $176 million for the quarter. Crushing volumes increased more than 6% over the year-ago quarter, though volumes decreased sequentially. Margins improved overall. North American margins benefited from good raw-material positioning; South America gained from better origination margins and strong fertilizer results in advance of the planting season; and Europe saw strong softseed margins. Refining, packaging, biodiesel and other results increased $6 million to $76 million for the quarter. South American biodiesel continued to improve, driving good margins and volumes in that business. Oilseeds results in Asia were $56 million for the quarter, principally reflecting ADM’s share of the results of its equity investee, Wilmar International Limited.