ADM profit beats forecasts on good soybean crush margins and strong demand
THE Archer-Daniels-Midland Co trading. released this Thursday positive results for the fourth quarter, with strong margins for crushing Soy and robust demand for crops boosting operating profit at its core business unit by 46%.
Adjusted operating income for Agricultural Services and Oilseeds, ADM’s largest business segment, rose to $1.18 billion from $810 million a year earlier, on strong exports of South American crops and good margins offsetting the negative impacts of reduced exports from USA.
Low water on the Mississippi River in September and October restricted barge shipments of freshly harvested crops to US Gulf Coast terminals during the peak of the post-harvest US export season.
Quarterly profits from oilseed milling more than doubled from a year earlier, ADM said.
Strong results in Agricultural Services and Oilseeds offset weaker gains in the ethanol biofuels operations and in the nutrition business.
The company’s adjusted net income was $1.1 billion, or $1.93 per share, for the three-month period ended Dec. 31, compared with an analyst estimate of $1.65 per share, according to data from Refinitiv.
Earnings beat analysts’ consensus estimate for the 14th consecutive quarter.
ADM increased its quarterly dividend by 12.5% to 45 cents.
The results offered insight into how global trading companies weathered rising energy costs and supply chain disruptions, such as the drop in grain exports from the Black Sea region following Russia’s invasion of Ukraine.
ADM and rivals, including Bunge Ltd., Cargill Inc and Louis Dreyfus Co.., earn money by processing, trading and shipping crops around the world. Supply chain intermediaries like ADM tend to thrive when crises such as drought or war cause shortages in parts of the world.
I am an author and journalist with a focus on market news. I have worked for a global news website for the past two years, writing articles on a range of topics relating to the stock market. My work has been published in international publications and I have delivered talks at both academic institutions and business conferences around the world.
Leave a Reply
You must be logged in to post a comment.