Market News & Headlines >> ADM Earnings Hit By Slow Farmer Selling
Farmers’ reluctance to sell weighed on Archer Daniels Midland’s fourth-quarter profits, which were down 27% from a year ago, the company reported Tuesday.
The primary reason for the decline was one-time charges related to ADM’s failed attempt to acquire Australia’s GrainCorp. But it also reported its grain merchandising profit fell to $84 million, down from $129 million a year ago. Profits fell on the slow farmer selling and on international “merchandising and execution issues.” Chief Operating Officer Juan Luciano said the company was aggressively addressing the later issue and has made some unspecified personnel changes in response.
Overall, ADM reported a profit of $374 million, or 56 cents a share, down from $510 million the prior year. Excluding the GrainCorp charge and other one-time items, however, earnings increased to 95 cents from 60 cents the prior year. Analysts were expecting earnings of 85 cents a share.
The company noted strong biodiesel demand and said its oilseed processing profits increased 16% to $478 million for the quarter. Corn processing earnings were vastly improved at $296 million, up from $3 million a year ago, thanks to lower corn prices and strong ethanol demand.
Company officials said that they were watching falling currencies in emerging markets but downplayed any impact to exports out of South America. The biggest impact, Luciano said, could be to farmer psychology. Farmers in Argentina have reportedly been hoarding soybeans rather than selling them for the rapidly devaluing peso.