Archer Daniels Midland 4Q Net Income Surges
By CHRISTOPHER LEONARD, AP Agribusiness Writer
DECATUR, Ill. (AP) Archer Daniels Midland Co., a major corn and soybean processor and ethanol maker, said Tuesday its fourth-quarter net income surged even as sales slipped.
The company said the profit boost came mainly from higher volumes and margins. Ethanol profits increased in the United States, as increased demand for soybean products in South America and Europe offset declines in North America.
Archer Daniels Midland also announced Tuesday it plans to build a new oilseed crushing plant in Paraguay that will boost its South American production by 25 percent.
Soybean production in Paraguay has been growing at an annual rate of 13 percent for the past 10 years, according to Archer Daniels Midland. The company said it plans to boost its oilseed crush volumes at about double the expected market rate over the next five years.
"This plant will link South America's productive farmers with the world's growing demand for food and energy," said John Rice, Archer Daniels Midland's executive vice president of Commercial and Production.
The project will create more than 150 permanent jobs, and an estimated 500 construction jobs as it is built.
The company, based in Decatur, Ill., said it earned $446 million, or 69 cents per share, up from $58 million, or 9 cents per share, in the same period last year. Revenue fell 5 percent to $15.7 billion from $16.53 billion. But, the cost of products sold fell 9 percent to $14.78 billion.
Analysts surveyed by Thomson Reuters expected ADM to earn 53 cents per share on $16.47 billion in revenue.
Operating profit in the company's oilseeds and corn processing segments increased. Operating profit in its agricultural services segment also improved.
The company is also laying plans to cash in on a turnaround in the ethanol industry, which is seeing profits return after a punishing period of high corn prices and lower fuel prices.
The company doesn't break out its ethanol results, but overall corn processing operating income increased by $151 million for the quarter, even as profits for sweeteners and starches fell $30 million. With ethanol profits rising, Archer Daniels Midland said it will begin production at its Cedar Rapids, Iowa plant, which should be fully operational by the end of August.
The company's stock rose 17 cents, or nearly 1 percent, to close at $28.49.