Archer Daniels Midland earnings whacked by ethanol downturn, yet surprise analysts braced for worse

In Illinois, Archer Daniels Midland beat analyst expectations in second quarter earnings released yesterday, but the company was whacked by the ethanol contraction in its corn processing division. Oilseeds processing operating profit increased $100 million for the quarter and $ 401 million for the six months, “due principally to improved crushing and origination margins partially offset by lower fertilizer sales volumes and margins,” according to the company.

However, corn processing profit contribution plunged $246 million for the quarter and $381 million for the six months, including a $269 million six-month drop in Bioproducts, which the company attributed to “a significant decline in ethanol margins resulting from sharply higher net corn and increased manufacturing costs, lower average selling prices and inventory write-downs.” Profits in the corresponding quarter for the corn division were $275 million; this year, $29 million.

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