Archer Daniels Midland profit slips 2%
Archer Daniels Mid-land (ADM) Company, parent company to Jamaica Flour Mills, said Tuesday its fiscal second-quarter profit slipped two per cent as its revenue was depressed by lower prices for agricultural products.
While sales volume rose during the quarter, that was offset by global food prices that have been dragged down from historic highs reached in 2008.
The global recession has depressed the price of key products like corn and soybeans as consumers cut back spending.
ADM is vulnerable to swings in food prices because it sells, ships and produces everything from raw soybeans to corn-based food ingredients and ethanol.
The company, based in Decatur, earned US$567 million, or 88 cents per share, in the three months ended December 31, down from US$578 million, or 90 cents per share, a year ago.
Analysts surveyed by Thomson Reuters expected 72 cents per share, but typically exclude one-time items from the estimates.
Even with sales volume up, ADM says revenue fell five per cent to US$15.9 billion from US$16.7 billion a year ago.
Analysts expected higher revenue of US$16.5 billion.
Archer Daniels Midland said it will benefit from a strengthening market for ethanol, which had been battered by low demand and higher corn costs.
The company started up an ethanol plant in Columbus, Nebraska, that will produce 300 million gallons (1.1 billion litres) annually.
Operating profit in ADM's corn processing segment jumped 10-fold during the quarter, to US$290 million from US$29 million the year before.