ADM earnings hurt by poor ethanol margins

Agribusiness conglomerate Archer Daniels Midland, with a large corn processing plant in southwest Cedar Rapids, reported lower second-quarter earnings and revenues.

Chicago-based ADM said its results were hurt by poor ethanol margins and lower earnings from its agricultural services unit, which includes exporting and trading operations.

The company recorded second-quarter net income of $284 million, or 48 cents per share, down from $386 million, or 62 cents per share, in the same period of 2015. Revenues from continuing operations dipped to $15.6 billion in the quarter that ended on June 30 from $17.2 billion in the second quarter of 2015.

'After a challenging start to the year, general market conditions began to turn at the end of the second quarter, providing us with improved opportunities for the second half of the year,” ADM Chairman and CEO Juan Luciano said in a news release.

'Weak grain handling margins and merchandising results continued for Ag Services. Results for corn processing included strong performance in sweeteners and starches offset by lower ethanol results.”

ADM's oilseeds processing operations were able to leverage flexible capacity to crush record volumes of soybeans in the second quarter as global protein demand continues to grow.

Luciano said ADM continues to make progress in the strategic review of its ethanol dry mills.

'We have implemented almost $150 million of new savings actions in the first half of the year and remain on track to meet our $275 million target by the end of the calendar year,” Luciano said. 'The first half of the year was very challenging. However, with improved fundamentals, we anticipate a more favorable second half of the year.”