Archer Daniels Midland Q3 profit soars as demand for grains and biofuels bounces back

ADM Q3 profits spike on grain, biofuels demand

ST. LOUIS — Archer Daniels Midland Co. reported that its third-quarter profit soared to more to $421 million from just $3 million in the same period last year on growing global demand for grains and biofuels.

The company, based in Decatur, Ill., said Tuesday that it earned 65 cents per share, compared with zero cents per share last year.

The results were buoyed by increasing global demand for U.S. soybeans, with the oilseeds processing unit delivering $405 million in profit. Executives said during a conference call Tuesday that export demand seemed was strengthening, and would likely remain strong.

Still, ADM’s results came in below Wall Street expectations, with analysts surveyed by Thomson Reuters forecasting a profit of 72 cents per share.

Company shares fell $1.06, or nearly 4 percent, to $26.66 as the Dow Jones industrial average fell more than about 240 points

The company was buffeted by bad hedging bets made in the corn processing business, where profit fell to $45 million, a $101 million decrease from the same period last year.

ADM’s long-ailing ethanol business continued its recovery, thanks to lower corn costs and better margins on ethanol. Ethanol producers were hit hard during the recession as job losses led to canceled vacations falling demand for all fuel.

Chief Executive Patricia Woertz said ethanol margins had just reached the “break even point” industry wide.

Woertz said ADM is well positioned to compete in the market as demand increases.

“I think we really have a long-term view here,” she said. “We feel very good about our logistics and ability to buy corn. We’re glad we’re in the business.”

ADM shipped the first commercial product from its joint-venture Mirel bioplastics plant as well.

Overall revenue at ADM rose 2 percent, to $15.1 billion, from $14.8 billion last year.

As export demand improved, profit increased $44 million to $165 million at the company’s agricultural services unit, which includes shipping. But agricultural services profit is still down $521 million for the nine months ended March 31, compared to last year.