(Updates with detail and fresh share price, and adds
background)
DOW JONES NEWSWIRES
Archer Daniels Midland Co. (ADM) reported an 83% fall in fiscal
fourth-quarter earnings Tuesday, though maintained it saw signs of
improvement in the global food, feed and renewable fuels
market.
The world's largest listed agribusiness group by revenue missed
analysts' expectations, sending its shares down as much as 9% in
pre-market trade as it also booked another charge for its palm oil
operation.
ADM's corn processing and agricultural services units both
reported a quarterly loss, with only oilseeds processing remaining
in surplus.
Ethanol and risk management had been a key driver of earnings
until last year's reversal in commodity markets and the subsequent
acceleration of the global economic slowdown.
The bioproducts business that includes ethanol fell to a loss of
$160 million in the quarter from a $123 million profit a year
earlier.
The agribusiness industry has been struggling since commodity
prices have dropped from their peak last summer. Ethanol-related
businesses have been hammered by slumping demand for the corn-based
fuel, with scores of them filing for bankruptcy.
ADM also booked another $61 million tax charge against its
investment in the palm oil venture with Wilmar International Ltd.,
taking full-year costs to $158 million. It has warned total charges
could run as high as $500 million.
Chairman and CEO Patricia Woertz said Tuesday that ADM sees
"signs of improving demand in the various food, feed and fuel
markets we serve."
For the quarter ended June 30, ADM reported a profit of $64
million, or 10 cents a share, down from $372 million, or 58 cents,
a year earlier. Revenue decreased 24% to $16.53 billion.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 45 cents on revenue of $15.24 billion.
Gross margin fell to 2.2% from 3.7%.
At the oilseed-processing division, the company's largest
segment, earnings fell 40% as volume declined and fertilizer
margins fell. The corn processing division, which includes Archer
Daniels' ethanol business, as well as starches and sweeteners,
moved to a segment loss mostly on weak demand for ethanol.
Shares were recently down 7.9% at $28 prior to the U.S. open.
The stock is up 11% the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com
(Doug Cameron contributed to this article)