Archer Daniels Midland's third-quarter profit drops 98 percent

Tuesday, May 5, 2009 | 10:45 a.m. CDT

ST. LOUIS — Archer Daniels Midland Co., a major corn and soybean processor and agribusiness heavyweight, said Tuesday its fiscal third-quarter profit tumbled an unexpectedly sharp 98 percent due to a drop in sales and one-time losses related to equity investments.

The adjusted results were below Wall Street expectations, and ADM shares fell 89 cents, or 3.4 percent, to $25.28 in morning trading.

The Decatur, Ill.-based company said its profit fell to $8 million, or a penny per share, in the three months ending March 31, down from $517 million, or 80 cents per share, a year ago.

The latest results included a loss of $229 million, or 36 cents per share, from equity investments. Excluding that, adjusted earnings would have been 37 cents per share.

That is below the analysts' consensus estimate of 49 cents a share, according to a survey by Thomson Reuters.

Sales fell 21 percent to $14.8 billion from $18.7 billion a year ago, and were well below the analysts' average estimate of $16.9 billion.

The company said it lost $132 million on derivative currency investments with the Mexican food company Gruma SAB de CV. An additional $97 million was lost to income tax the company paid after buying the Asian agribusiness company Wilmar International Ltd.

There were not many bright spots in Archer Daniels Midland's broad portfolio of agribusiness ventures, which include processing crops, shipping commodities and making biofuels. Profits from soybean and corn processing were both down.

The battered ethanol market contributed to a profit decrease of $167 million in the company's biofuels division as higher corn costs and lower gasoline costs ate into margins.

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