Archer-Daniels-Midland Co., the world’s largest processor of corn, posted second-quarter earnings and sales that missed analysts’ estimates after a decline in ethanol margins and crop export volumes.
Profit excluding one-time items was 60 cents a share, the Chicago-based company said in a statement Tuesday, trailing the 65-cent average of 11 analysts’ estimates compiled by Bloomberg. Revenue declined to $17.2 billion from $21.5 billion, compared with the $20.6 billion average estimate.
Among ADM’s four business segments, the biggest decline in operating profit was seen at the corn-processing unit, which faced increased competition in the ethanol market after industry output rose to a record.
Earnings also fell at the agricultural services segment, which buys, stores and sells commodities including corn and soybeans. ADM blamed lower volumes and margins for North American exports, which came under pressure from shipments from South America.
North American exports “were less competitive globally,” Chief Executive Officer Juan Luciano said in the statement.
Furthermore, profits from the agricultural services unit’s trading desk were hit by the “significant” increase in some commodity prices at the end of the quarter, ADM said. Corn futures in Chicago jumped 20 percent during the last two weeks of June.
The company’s two other units -- the oilseeds segment and its flavors and ingredients business -- saw higher operating income in the quarter. Overall, net income fell to 62 cents a share from 81 cents a year earlier.
ADM’s performance is often closely tied to the dynamics of domestic agriculture. Despite efforts in recent years to diversify geographically, 67 percent of its long-term assets were in the U.S. at the end of 2014, according to data compiled by Bloomberg. That’s down from 72 percent in 2012.
ADM dropped 2.1 percent to $46.72 at 8:20 a.m. before the start of regular trading in New York.