ADM income rises in third quarter
DECATUR, ILL. — Net income at Archer Daniels Midland Co. in the third quarter ended March 31 was $421 million, equal to 65c per share on the common stock, up sharply from $3 million in the third quarter of fiscal 2009. ADM said the $418 million increase reflected a $442 million pre-tax increase in segment operating profit, a $30 million after-tax favorable impact from changing LIFO inventory valuations, and lower income tax expense. Last year’s third quarter included a $132 million one-time charge related to equity investments.
Net sales were $15,145 million, up 2%.
“In the third quarter, the ADM team did a good job managing our large, flexible origination and processing network to meet global demands,” said Patricia A. Woertz, chairman and chief executive officer. “We also completed start-up of our Columbus (Neb.) ethanol dry mill and began shipments from our renewable plastics plant in Clinton (Iowa), and are commissioning our propylene glycol plant in Decatur.”
Within its processing businesses, the widest improvement was in the Corn Processing Operating segments. Operating profits were $104 million, up 112% from $49 million in the third quarter of fiscal 2009.
The gain in large part reflected a sharp increase in bioproducts, which posted operating profit of $59 million after sustaining a loss of $97 million a year ago. The company attributed the gain to lower net corn costs and improved ethanol margins resulting from good ethanol demand driven by favorable gasoline blending economics.
The sweeteners and starches business accounted for $45 million of the $104 million profit in the quarter, but it was down 101% year over year because of lower average selling prices that were offset only partially by lower net corn costs.
Operating profit of the Oilseeds Processing segment was $405 million, up 81% from $224 million in the same quarter in the last fiscal year.
Results benefited from a $172 million gain in crushing and origination and a $14 million improvement in refining, packaging and biodiesel, which offset weaker results in Asia.
ADM’s Other segment, which includes flour milling and cocoa processing, had operating income of $22 million, which compared with a loss of $140 million in the third quarter last year.
ADM said the increase reflected improved results from its flour milling operations. Last year’s third quarter reflected a loss of $212 million for ADM’s share of foreign-currency-derivative losses of Gruma S.A.B. de C.V.
Operating profit in the Agricultural Services segment rose 36% to $165 million.
For the nine months ended March 31, ADM net income was $1,484 million, or $2.30 per share, down 9% from $1,626 million, or $2.52 per share. Sales were $45,979 million, down 13%.