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CHICAGO - U.S. agribusiness group Archer Daniels Midland Co reported lower quarterly profit on Tuesday on weak ethanol results and as a strong dollar and ample global crop supplies limited North American grain exports.
Chicago-based ADM, one of the world's top producers of corn-based ethanol, said earnings in its corn processing unit tumbled 62 percent due to thin margins and high inventories of the biofuel.
Oilseeds processing profit fell 21 percent in the third quarter while earnings at its agricultural services, ADM's largest segment in terms of revenue, dipped 3 percent.
The lower results came despite rising global demand for food and amid ample global supplies of corn, soybeans and other crops following massive harvests in North and South America and other key production areas around the globe.
The core businesses of ADM and its rivals Bunge Ltd and Cargill Inc buy, sell, transport, store and process grains and oilseeds. Margins are typically thin, but volumes are massive when crop supplies are ample and prices are low, as they currently are.
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ADM reported that net third-quarter profit tumbled to $252 million, or 41 cents per share, from $747 million, or $1.14 per share, a year earlier.
Excluding one-time items, earnings fell to 60 cents per share from 86 cents a year ago, Analysts expected 70 cents per share, according to Thomson Reuters I/B/E/S.
Profit at ADM's agricultural services segment slipped to $149 million as a strong dollar reduced competitiveness of crop exports from North America, where many of the company's operations are concentrated.
Meanwhile, a weak Brazilian real triggered active farmer selling in that country, flooding the global market with cheaper supplies.
Corn processing results slid to $165 million from $341 million a year earlier, largely on lower profit from bioproducts, which includes the company's ethanol business.
Profit in ADM's oilseeds unit fell to $276 million, down $72 million from a strong quarter a year earlier.
Wild Flavors and Specialty Ingredients, the company's newest segment, earned $70 million in the quarter, up $5 million from a year ago.
Shares of ADM were off 5.3 percent to $43.85 in light premarket trading and down about 11 percent on from the beginning of the year.
