ADM earnings climb 33% on accounting gain

by Eric Schroeder
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DECATUR, ILL. — Net income at Archer Daniels Midland Co. in the first quarter ended Sept. 30 rose 33% to $460 million, equal to 68c per share on the common stock, up from $345 million, or 54c per share, in the first quarter of fiscal 2011. The increase primarily reflected a LIFO (last-in, first-out) gain of 11c per share and a 1c per share in debt exchange costs. Excluding the gain, ADM’s adjusted earnings per share were 58c, down 13% from 67c per share a year ago.

Net sales in the first quarter were $21,902 million, up 30% from $16,799 million in the same period a year ago.

“The first quarter presented a difficult and challenging market environment,” said Patricia Woertz, chairman and chief executive officer. “Margin conditions in our global oilseeds segment were generally weak, and net corn costs were high. We offset some of these pressures with good management of our commodity positions and by capturing opportunities through our broad and diverse portfolio.

“During the quarter, we acquired oilseeds facilities in Poland and India, and expanded our agricultural services operations to support exports. And we returned capital to shareholders through dividends and share buybacks of $347 million. Looking ahead, we see the margin environment modestly improving, and we are optimistic about the long term.”

Overall operating profit fell 9% in the first quarter to $699 million, down from $765 million in the same period a year ago.
The sharpest decline during the first quarter occurred in the Corn Processing segment, where operating profit fell 48% to $179 million from $349 million. Net sales and other operating income in the segment rose 53%, to $3,293 million from $2,155 million. Within the segment, sweeteners and starches profit fell 81% to $28 million while bioproducts profit decreased 23% to $151 million.

ADM’s Oilseeds Processing segment profit eased 29% in the quarter, falling to $221 million from $308 million. Sales and other operating income in the segment rose 37% to $8,326 million.

The company’s Agricultural Services segment posted an 85% increase in operating profit during the first quarter of fiscal 2012, climbing to $244 million from $132 million in fiscal 2011. Sales and other operating income in the segment rose 25% to $8,666 million from $6,926 million.

The ADM Other segment, which sustained a loss of $16 million in the first quarter of fiscal 2011, recorded an operating profit of $55 million in the first quarter of fiscal 2012. Sales and other operating income in the segment fell 1% to $1,617 million from $1,627 million.
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