CHICAGO, Ill. (Reuters) — Archer-Daniels-Midland Co. beat Wall Street expectations for third-quarter profit on good ethanol and sweetener margins and strong Brazilian crop exports, though results were lower year-on-year.
The company said it was raising its full-year earnings outlook after a strong first three quarters and a favourable market environment.
ADM has capitalized on good demand for food, animal feed and biofuel, while record-large corn and soybean harvests in Brazil have offset reduced supplies from drought-hit Argentina and war-torn Ukraine.
It makes money by processing, trading and shipping crops around the world, often thriving when crises such as war or drought trigger shortages.
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ADM posted an adjusted profit of $1.63 per share for the three months ended Sept. 30, which was above analysts’ average estimate of $1.52 per share but short of the $1.86 per share posted in last year’s strong third quarter, according to LSEG data.
The company’s Ag Services and Oilseeds unit, its largest in terms of revenue, posted a 21 percent drop in operating profit as a surge in South American crop exports dented demand for supplies from the United States, home to the bulk of the company’s operations. Lower year-on-year oilseed crushing results also dragged on profit.
Sharply lower results at Singapore-listed agribusiness Wilmar International pressured ADM’s oilseeds sub-segment. The company owns a 22.5 percent equity stake in Wilmar and is a joint venture partner with Wilmar in vegetable oil producer Olenex.
