LOS ANGELES – Archer Daniels Midland Co. (ADM), the largest U.S. food processor, Friday reported a 77 percent rise in quarterly profit, helped by record North American harvests and lower grain and oilseed prices, driving shares up 9 percent.
Decatur, Illinois-based ADM takes commodities such as corn and soybeans and processes them into byproducts like ethanol, sweeteners and soymeal for animal feed.
Net income rose to $266.3 million, or 41 cents a share, in the fiscal first quarter ended Sept. 30, from $150.2 million, or 23 cents, a year earlier.
Earnings were well ahead of Wall Street analysts' average estimate of 27 cents a share, according to Reuters Estimates.
Net sales rose 13 percent to $8.97 billion.
"Declining prices did have a positive impact on the total earnings for the quarter," Chief Executive G. Allen Andreas said in a conference call with analysts, but added that the results for the quarter were "not just an aberration."
The company said results at its corn processing unit declined during the quarter, but lower corn costs should help that business in the coming quarter.
"The prospect for the next few quarters is very positive," Andreas said, though higher energy costs will continue to hamper margins.
The company has no plans to cut capacity in its corn processing business despite weakening demand for high-fructose corn syrup (search), which is used to sweeten soft drinks and other packaged foods.
"We continue to find needs for the starch," Andreas said, citing increased demand for ethanol in particular.
Earnings in ADM's oilseeds processing unit rose 34 percent to $91 million as improved results in North America and Europe helped offset softness in Asia.
ADM shares were up $1.68 or 9.4 percent at $19.49 on the New York Stock Exchange (search). Earlier in the session, the shares hit a seven-year high at $19.55.