Tags: Earns | Archer Daniels Midland

Archer Daniels Midland Profit Falls as Taxes Jump

Tuesday, 02 Aug 2011 08:49 AM

Agribusiness conglomerate Archer Daniels Midland Co. said Tuesday its fiscal fourth-quarter earnings fell 15 percent as a higher tax rate offset surging revenue.

The Decatur, Ill., company earned $381 million, or 58 cents per share. That compares with $446 million or 69 cents per share in the second quarter of 2010.

Revenue leaped 46 percent to $22.87 billion from $15.7 billion.

The results surprised Wall Street. Analysts expected a profit of 85 cents per share on revenue of $19.55 billion, according to FactSet. Shares fell about 4 percent in premarket trading to $29.26.

Archer Daniels says its taxes more than tripled to $385 million. That was due to some one-time items and changes in the company's geographic focus. That more than offset an $89 million increase in operating profit. It expects its tax rate to fall from about 50 percent in the fiscal fourth-quarter to between 28 and 30 percent for fiscal 2012.

The company's operating profit improved in every segment except corn processing, due to significantly higher corn costs. Global prices for corn, wheat and soybeans have roughly doubled since last summer.

For a company like Archer Daniels, the volatile prices can be both good and bad. The company sells and ships grain, so it can benefit from higher prices. But it also has to buy huge quantities of grain to make processed food ingredients and additives, and higher prices eat into profit.

For all of fiscal 2011, the company earned $2.03 billion, or $3.13 per share, compared with $1.93 billion, or $3 per share in fiscal 2011.

Revenue rose to $80.67 billion from $61.68 billion the year before.

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Agribusiness conglomerate Archer Daniels Midland Co. said Tuesday its fiscal fourth-quarter earnings fell 15 percent as a higher tax rate offset surging revenue. The Decatur, Ill., company earned $381 million, or 58 cents per share. That compares with $446 million or 69...
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Tuesday, 02 Aug 2011 08:49 AM
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