U.S. agricultural processor and ethanol producer Archer Daniels Midland Co reported stronger-than-expected quarterly earnings on Tuesday as rising grain prices and robust global demand bolstered results, sending its shares up 6.3 percent in premarket trading.
For the fiscal second quarter ended Dec. 31, net profit was $732 million, or $1.14 per share, compared with $567 million, or 88 cents per share, a year earlier.
Excluding gains related to ADM’s acquisition of Golden Peanut, earnings were $1.06 per share, handily beating analysts’ average forecast of 78 cents, according to Thomson Reuters I/B/E/S.
“Amid strong demand and regional dislocations, we used our vast global network to deliver for our customers and shareholders,” said Patricia Woertz, ADM chairman and CEO.
ADM, the world’s largest corn processor and one of the top ethanol producers in the United States, said profit rose in its corn processing and agricultural services segments, more than offsetting lower results in oilseed processing.
Corn processing profit jumped 38 percent to $399 million as good ethanol margins and increased production of the biofuel eclipsed tighter margins in sweeteners and starches.
Agricultural services profit rose by $276 million to $426 million as ADM exported record volumes of grain and oilseeds in the quarter while crop and transportation prices climbed.
Operating profit in oilseed processing declined 8 percent to $325 million on weaker results in Asia and Europe.
Earnings in ADM’s other business units, including wheat milling and cocoa processing, rose 19 percent to $212 million.
Shares of Decatur, Illinois-based ADM climbed 6.3 percent to $34.74 in premarket trading. The shares closed Monday at $32.67 on the New York Stock Exchange, up 8.6 percent from the beginning of the year but down about 3.7 percent from a 2-1/2 year peak in mid-January.
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