Archer Daniels Midland Co. (ADM) reported fiscal 2010 third-quarter earnings before the opening bell on Tuesday. The company’s earnings surged to 65 cents per share, compared to break-even EPS in the year-ago period, primarily driven by improved performance in oilseeds and corn processing. Quarterly earnings still missed the Zacks Consensus Estimate of 72 cents per share.

Archer Daniels’ net sales during the quarter grew by 2% to $15.1 billion from $14.8 billion in the year-ago quarter, primarily due to an 8% growth in Oilseeds processing sales to $5.1 billion coupled with a 14% increase in Corn processing to $2.0 billion. However, overall sales were partially offset by a 7% decline in Agricultural services to $6.8 billion.

Total segment operating profit for Archer Daniels increased to $696 million from $254 million in the prior-year quarter. Operating profit for Oilseeds Processing segment increased $181 million year-over-year due to higher volumes, improved margins and increased demand for biodiesel in Europe and South America.

Operating profit for the Corn Processing segment increased $55 million year-over-year on lower net corn costs and improved bioproducts results, due to higher demand for ethanol amid favorable gasoline blending economics. However, segment operating income was partially offset by lower average selling prices in sweeteners and starches.

Operating profit for the Archer Daniels’ Agricultural Services segment increased $44 million year-over-year on improvement in merchandising and handling results. Operating profit from the Other business segment grew $162 million for the quarter due to improved performance of flour milling operations.

During the quarter, Archer Daniels completed the start-up of its ethanol facility in Columbus, Nebraska. The company also stated that it has begun shipments from its renewable plastics facility in Clinton, Iowa in the quarter and is in the process of commissioning its propylene glycol plant in Decatur, Illinois.

Archer Daniels ended the quarter with cash and cash equivalents of $1.7 billion and long-term debt of $7.2 billion, compared to $2.2 billion of cash and $7.6 billion of long-term debt in the year-ago period. During the first nine months of fiscal 2010, Archer Daniels generated $2.8 billion of cash from operations and deployed $1.2 billion towards capital expenditure, $706 million towards debt repayments and $276 million towards dividends.
Read the full analyst report on “ADM”
Zacks Investment Research