UPDATE: ADM 4Q Profit Falls 83%; Sees Signs Of Improved Demand

(Updates with detail and fresh share price, and adds background)

 
   DOW JONES NEWSWIRES 
 

Archer Daniels Midland Co. (ADM) reported an 83% fall in fiscal fourth-quarter earnings Tuesday, though maintained it saw signs of improvement in the global food, feed and renewable fuels market.

The world's largest listed agribusiness group by revenue missed analysts' expectations, sending its shares down as much as 9% in pre-market trade as it also booked another charge for its palm oil operation.

ADM's corn processing and agricultural services units both reported a quarterly loss, with only oilseeds processing remaining in surplus.

Ethanol and risk management had been a key driver of earnings until last year's reversal in commodity markets and the subsequent acceleration of the global economic slowdown.

The bioproducts business that includes ethanol fell to a loss of $160 million in the quarter from a $123 million profit a year earlier.

The agribusiness industry has been struggling since commodity prices have dropped from their peak last summer. Ethanol-related businesses have been hammered by slumping demand for the corn-based fuel, with scores of them filing for bankruptcy.

ADM also booked another $61 million tax charge against its investment in the palm oil venture with Wilmar International Ltd., taking full-year costs to $158 million. It has warned total charges could run as high as $500 million.

Chairman and CEO Patricia Woertz said Tuesday that ADM sees "signs of improving demand in the various food, feed and fuel markets we serve."

For the quarter ended June 30, ADM reported a profit of $64 million, or 10 cents a share, down from $372 million, or 58 cents, a year earlier. Revenue decreased 24% to $16.53 billion.

Analysts polled by Thomson Reuters most recently were looking for earnings of 45 cents on revenue of $15.24 billion.

Gross margin fell to 2.2% from 3.7%.

At the oilseed-processing division, the company's largest segment, earnings fell 40% as volume declined and fertilizer margins fell. The corn processing division, which includes Archer Daniels' ethanol business, as well as starches and sweeteners, moved to a segment loss mostly on weak demand for ethanol.

Shares were recently down 7.9% at $28 prior to the U.S. open. The stock is up 11% the past year.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]

(Doug Cameron contributed to this article)