- Grains giant Archer Daniels Midland Co. had a lower-than expected profit in Q2, with net earnings at $284 million — or 48 cents a share. Last year at this time, earnings were $386 million — or 62 cents a share.
- The company attributes the profit tumble — 41 cents a share, below analysts' estimate of 45 cents a share — to lower earnings from its agricultural services unit and poor ethanol margins.
- ADM has had a difficult earnings year, with Q1 profits down 53% from trade losses from volatile crop prices.
ADM's agricultural services sector saw a 36% drop in operating profit when compared with Q2 last year — $97 million, compared with $152 million. This report is its fifth consecutive earnings miss. With its traditional business so dismal, ADM Chairman and CEO Juan Luciano touted some of the company's newer acquisitions and services as revenue opportunities in the earnings report.
Corn processing was a bright spot, with operating profit increasing to $219 million from $204 million. Last year, the company purchased corn wet mills in Bulgaria and Turkey, as well as 50% of a wet mill in Hungary. The earnings report cited these acquisitions as important to the growth in that area.
The report also touted its flavor business, with steady operating profit and new opportunities. This spring, ADM opened a new flavor creation, application and customer service facility in New Jersey. In May, the company also acquired full ownership of Amazon Flavors, a Brazilian manufacturer of extracts, emulsions and compounds.