Earnings
Archer Daniels Profit Narrows; Shares Sink
Scott Eden
05/05/09 - 10:27 AM EDT
P/>Archer Daniels Midland(ADM) fell short of Wall Street forecasts with its first-quarter earnings Tuesday on weakening demand worldwide for its agricultural and food products.
The Decatur, Illinois, conglomerate reported an adjusted per-share profit -- excluding a big loss related to an investment -- of 37 cents a share. Analysts were expecting 49 cents a share, according to a survey by Thomson Reuters.
The company's top line also disappointed. Compared with last year's first quarter, revenue declined 21% to $14.8 billion, below analysts' targets of $16.9 billion.
Including items, Archer reported a narrow profit: $8 million, or a 1 cent a share, down from $517 million, or 80 cents a share, a year ago.
The company, which processes soybeans and corn and produces ethanol, blamed the year-over-year declines on slumping prices in its ethanol business and generally soft demand for its agricultural products as commodities prices sank from last summer's highs.
Archer said that its investment loss in the quarter totaled a whopping $229 million, or 36 cents a share, the result of currency-derivatives trades that went sour. The trades were made by a company in which Archer has a large investment: Gruma SAB de CV, a Mexico-based corn-flour maker.
Archer shares were trading this morning at $24.72, down $1.45, or 5.5%.