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ADM Earnings Exceed Expectations

Associated Press
Published | Updated

DECATUR, Ill. – Shares in agricultural processing giant Archer Daniels Midland Co. (ADM) jumped 5.5 percent Friday after the company reported quarterly earnings that exceeded Wall Street estimates.

The Decatur-based company, one of the world's largest processors of corn and other grains, reported net income of $195.5 million, or 30 cents a share, for its fiscal fourth quarter. That compares to a loss of $103.1 million, or 16 cents per share, a year earlier when an after-tax charge of $252 million for a fructose litigation settlement reduced the period's results by 39 cents per share.

The latest results were 2 cents a share better than the mean estimate of analysts polled by Thomson Financial. ADM shares were up $1.22 to $23.57 Friday on the New York Stock Exchange (search).

ADM's quarterly sales declined 3 percent to $9.42 billion from $9.69 billion last year.

Income rose for the quarter and fiscal year in each of the company's operating segments except corn processing, where lower selling prices for the livestock feed additive lysine (search) and higher energy costs cut profits by $33 million for the quarter and $131 million for the year.

Expected increases in demand for corn-based ethanol fuel (search) spurred by energy legislation now before Congress should help the segment rebound, said G. Allen Andreas, chairman and chief executive.

"We see that there is going to be a quite substantial increase in the need even in the next year or two," he said in a conference call with analysts. "There's about 4 billion gallons, at the end of last year, of capacity and the markets are expanding at a level that might increase that by as much as 50 percent in the next couple of years."

Andreas said ADM also sees higher worldwide interest in biodiesel, a fuel made from soybeans.

For the full year, Decatur-based ADM earned $1.04 billion, or $1.59 per share, on revenues of $35.9 billion.

ADM is among the biggest processors of soybeans (search), corn, wheat and cocoa and produces soy meal and oil, ethanol, corn sweeteners and flour, with more than 250 processing plants worldwide. The company employs more than 26,000 people.