Consumer Products

ADM Profits Rise on Lower Corn Costs, Ethanol Demand

Corn Field
Source: Thinkstock
Archer Daniels Midland Co. (NYSE: ADM) reported fourth-quarter and full-year 2013 earnings Tuesday morning. For the quarter, the agribusiness giant posted adjusted diluted earnings per share (EPS) of $0.95 on revenues of $24.14 billion. In the same period a year ago, the company reported EPS of $0.60 on revenues of $24.92 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.85 and $24.7 billion in revenues.

For the full year, ADM posted EPS of $2.33 on revenues of $89.8 billion compared with 2012 EPS of $2.30 and revenues of $90.56 billion. The consensus estimates called for $2.23 EPS on revenues of $90.61 billion.

Exclusions from per-share calculations include a $0.25 charge related to ADM’s failed bid to acquire Australia’s GrainCorp, an $0.11 asset impairment charge related to the company’s Brazilian sugar mills and a $0.13 credit for biodiesel production. On a GAAP basis, ADM posted EPS of $0.56 in the fourth quarter, compared with GAAP EPS of $0.77 in the same period a year ago.

The company did not offer guidance in its earnings release, but the consensus estimates for the first quarter of 2014 call for EPS of $0.86 on revenues of $22.18 billion. For the full year, analysts expect EPS of $3.25 and revenues of $91.41 billion.

The company’s CEO said:

Lower corn costs and improved ethanol margins helped support a significant improvement in our Corn business. Our great Oilseeds performance was driven by our ability to meet robust global demand for meal and by improved biodiesel results in North America and Europe. However, our Ag Services business was impacted by the slow farmer-selling of corn and challenges in international merchandising. … We’re ahead of schedule in our cost savings efforts. … Looking ahead, we continue to see strong global demand for our products and large crop supplies. We expect continued good utilization of our North American network until South America’s large harvest reaches global markets.

The company’s oilseeds division operating profit jumped $67 million year-over-year. Corn processing profit rose by $296 million to $223 million, including an increase of $228 million in the company’s bioproducts division, which includes ethanol processing.

ADM shares were inactive at $38.91 in the premarket this morning, in a 52-week range of $28.31 to $43.99. The consensus target price for the shares was around $43.80 before this report.