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Archer
Daniels Midland Reports Second Quarter Results
Decatur, IL—Archer Daniels Midland (NYSE: ADM)
reports net earnings for the quarter ended December 31, 2007 increased
7% to $473 million—$.73 per share from $ 441 million—$.67
per share last year.
“ADM’s record earnings for the second quarter and first
half of fiscal 2008 demonstrate the value created by and the strengths
of our broadly diversified asset base and product portfolio,”
said Patricia Woertz, chairman and CEO.
“This quarter, heightened demand, coupled with geographic crop
imbalances, drove volumes, prices and volatility in many key markets.
"Our team’s
skill in managing both risk and rapidly changing market opportunities,
enabled us to deliver outstanding value for our shareholders.”
Second quarter segment operating profit increased 25 % to $ 955 million
from $ 767 million last year.
Oilseeds Processing operating profit increased on improved margin conditions
due to strong protein and oil demand.
Corn Processing operating profit decreased due to lower ethanol selling
prices and increased net corn costs.
Agricultural Services operating profit increased due to improved global
grain merchandising and handling results.
Other segment operating profit increased primarily due to improved results
of wheat and malt processing operations and increased financial services
income.
Discussion of Operations
Net sales
and other operating income increased 50 % to $ 16.5 billion.
Increased selling prices resulting from sharp rises in commodity prices
accounted for approximately 78% of the increase while higher sales volumes,
principally feed grains, ethanol and wheat, accounted for the remaining
22% increase.
Net earnings increased $32 million for the quarter and $69 million for
the six months due principally to increased segment operating profit
of $188 million for the quarter and $337 million for the six months
partially offset by increased corporate charges related principally
to LIFO inventory valuations.
In addition, income taxes increased due primarily to increased pretax
earnings and to a higher effective tax rate resulting from changes in
the geographic mix of earnings.
Oilseeds Processing
Oilseeds Processing operating profit increased $27 million for the quarter
and $66 million for the six months due principally to strong global
demand for protein meal and oil.
Worldwide crush volumes increased 2% for the six months to 14.7 million
metric tons.
Crushing and origination results increased $12 million for the quarter
and $39 million for the six months due principally to better crush margins
in North America and improved origination results in South America partially
offset by reduced results of European operations and increased manufacturing
costs.
Value added refining, packaging, biodiesel and other results for the
quarter and six months include asset abandonment charges of $15 million
and $18 million, respectively, compared to $2 million in the prior year
quarter and six months.
Excluding these charges, refining, packaging, biodiesel, and other operating
profits increased $6 million for the quarter and $22 million for the
six months principally from improved refining volumes and margins.
Asia results increased $ 22 million for the quarter and $ 21 million
for the six months reflecting the Company’s share of improved
operating earnings of Wilmar International Limited.
Corn Processing
Corn Processing operating profit decreased $61 million for the quarter
and $ 97 million for the six months.
Sweeteners and Starches operating profit decreased $5 million for the
quarter on higher average sweetener and starch selling prices and favorable
risk management results, offset by higher net corn and manufacturing
costs.
For the six months, Sweeteners and Starches operating profit increased
$40 million due principally to favorable risk management results.
Bioproducts results declined $56 million for the quarter and $137 million
for the six months due principally to higher net corn costs and lower
ethanol selling prices partially offset by increased ethanol sales volumes
and favorable risk management results.
In addition, specialty feed results improved on increased selling prices
and volumes.
Agricultural Services
Agricultural Services results increased $184 million for the quarter
and $298 million for the six months due principally to improved global
merchandising and handling results as volatile commodity market conditions,
large North American crops and global wheat shortages provided increased
margin and volume opportunities.
Transportation results declined due principally to lower barge freight
rates and increased operating costs.
Other
Other operating profit increased $ 38 million for the quarter and $
70 million for the six months.
Wheat, Cocoa and Malt operations improved $ 28 million for the quarter
and $ 23 million for the six months due principally to improved wheat
and malt processing operating efficiencies and margins partially offset
by lower cocoa press margins.
Financial earnings improved $ 10 million for the quarter and $ 47 million
for the six months principally due to marketable security gains of the
Company’s brokerage services business, and income from private
equity fund investments.
For the complete Second Quarter financial records, click here.
For more information, call
David Weintraub at 217-424-5413, or Dwight Grimestad at 217-424-4586.
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