ADM earnings drop 30% on ethanol, European oilseed margins

Agribusiness giant Archer Daniels Midland on Tuesday reported a sharp drop in third-quarter earnings, primarily due to poor ethanol and European oilseed profit margins.

Decatur, Ill.-based ADM, with significant corn processing operations in Cedar Rapids and Clinton, reported net earnings of $399 million, or 60 cents per share, for the quarter that ended March 31, down 30 percent  from $578 million, or 86 cents per share, in the third quarter of fiscal 2011.

Net sales were $21.5 billion in the third quarter, up from $20.1 billion in the same quarter a year ago.

ADM said corn processing operating profit fell $74 million from $204 million in the third quarter of fiscal 2011 to $130 million in the most recent quarter as improved sweetener results were offset by a sharp decline in ethanol profit margins.

Oilseeds processing operating profit was $395 million, down $117 million from $512 million, primarily due to the absence of significant, favorable timing effects that boosted year-ago results. The company said improved oilseeds processing results in North and South America significantly offset weakness in Europe.

Patricia Woertz, ADM chairwoman and chief executive officer, said the company delivered good results despite a tough climate in some market segments and geographic regions.

"Looking ahead, planting is underway in North America, and we're encouraged by the projected corn and soybean acreage," Woertz said. "We continue to leverage our global origination, processing and transportation network to deliver products to our customers and returns to our shareholders."