Chicago | Reuters –– U.S. agribusiness Archer Daniels Midland on Tuesday reported higher-than-expected quarterly profit on strong oilseed crushing margins and robust global demand for soybean meal.
Revenue, however, fell 15 per cent as the strong dollar limited U.S. grain exports, and corn processing profit fell on weak ethanol margins and lower biofuel production volumes.
Chicago-based ADM’s first-quarter net profit rose to $493 million, or 77 cents per share, from $267 million, or 40 cents per share, a year earlier (all figures US$).
Excluding one-time items, earnings increased to 80 cents per share from 64 cents a year ago, topping the average analyst estimate of 71 cents per share, according to Thomson Reuters I/B/E/S.
Revenue dropped to $17.51 billion from $20.70 billion a year earlier. Analysts, on average, expected revenue of $20.58 billion.
ADM’s agricultural services business, its largest in terms of revenue, posted a net profit of $194 million, up from $142 million a year earlier. Higher global merchandising volumes and margins boosted results for the unit, which buys, sells, stores and transports grains and other agricultural products.
Oilseeds processing profit surged 58 per cent to $469 million from $297 million a year earlier on record-large soy crushing volumes in Europe and North America and rising volumes in South America, where farmers are harvesting a bumper crop.
Poor ethanol margins and lower production in the quarter dragged down results at ADM’s corn processing segment. The unit earned a net $113 million, down 39 per cent from $186 million a year earlier.
ADM’s new ingredients segment’s quarterly profit jumped 17 per cent to $68 million from $58 million a year earlier.
ADM shares closed at a four-month high on Monday.
— Karl Plume reports on agriculture and ag markets for Reuters from Chicago.