10-QPeriod: Q1 FY2011

Archer-Daniels-Midland Co Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 10, 2011For Securities:ADM

Summary

Archer-Daniels-Midland Co. (ADM) reported a strong first quarter for fiscal year 2011, with net sales increasing significantly by 33% to $20.1 billion compared to the prior year period. This growth was primarily driven by higher average selling prices across its segments, reflecting increased underlying commodity costs and growing global demand. Net earnings attributable to controlling interests saw a substantial rise of $157 million, reaching $578 million, bolstered by a robust increase in segment operating profit and the absence of prior year charges. The company demonstrated solid operational performance across its key segments, with Oilseeds Processing, Corn Processing, and Agricultural Services all contributing to the improved profitability. Notably, Corn Processing saw a significant boost in operating profit, largely due to favorable ownership positions and increased lysine gross margins. ADM also successfully managed its liquidity, with a strong current ratio and a well-supported commercial paper borrowing facility, while also actively exploring options to further diversify its funding sources.

Financial Highlights

49 data points
Beta

Revenue

$20.08B

5.8% Gross Margin

Net Income

$578.00M

2.9% Net Margin

EPS (Diluted)

$0.86

Total Assets

$43.76B

Cash & Equivalents

$858.00M

Free Cash Flow

-$5.66B

Financial Statements
Beta
Revenue$20.08B
Cost of Revenue$18.92B
Gross Profit$1.16B
SG&A Expenses$395.00M
Interest Expense$121.00M
Net Income$578.00M
EPS (Basic)$0.91
EPS (Diluted)$0.86
Shares Outstanding (Basic)638.00M
Shares Outstanding (Diluted)684.00M

Key Highlights

  • 1Net sales increased by 33% to $20.1 billion for the three months ended March 31, 2011, compared to $15.1 billion in the prior year, driven by higher average selling prices.
  • 2Net earnings attributable to controlling interests grew by 38% to $578 million ($0.86 per diluted share) from $421 million ($0.65 per diluted share) in the same period last year.
  • 3Segment operating profit increased by $310 million to $1,006 million, reflecting improved performance across Oilseeds Processing, Corn Processing, and Agricultural Services.
  • 4Oilseeds Processing segment sales grew 31% to $6.6 billion, with strong performance in crushing and origination, partially offset by decreased sales volumes of certain products.
  • 5Corn Processing segment sales increased 28% to $2.5 billion, primarily due to higher average selling prices for ethanol and improved demand for sweeteners and starches.
  • 6Agricultural Services segment sales rose 38% to $9.3 billion, driven by higher average selling prices and increased global sales volumes.
  • 7The company reported $1.6 billion in cash, cash equivalents, and short-term marketable securities as of March 31, 2011, with a current ratio of 1.7 to 1.

Frequently Asked Questions

Net sales and other operating income increased by 33% to $20.1 billion for the three months ended March 31, 2011. This substantial growth was primarily attributed to higher average selling prices across all segments, reflecting increased underlying commodity costs and robust global demand for ADM's products.

Net earnings attributable to controlling interests increased by 38% to $578 million in the first quarter of fiscal year 2011, up from $421 million in the same period last year. This improvement was driven by a significant $310 million increase in segment operating profit and the absence of prior year charges related to early debt extinguishment.

ADM maintained a strong liquidity position with $1.6 billion in cash, cash equivalents, and short-term marketable securities as of March 31, 2011, and a current ratio of 1.7 to 1. The company also has substantial credit facilities totaling $8.5 billion, with $4.1 billion unused, indicating continued financial flexibility to manage its capital-intensive operations and investments.

The acquisition of Alimenta (USA), Inc., which resulted in ADM gaining 100% ownership of Golden Peanut, the leading U.S. peanut sheller and oil refiner, was a notable event. This transaction was accounted for in the third quarter of fiscal year 2011. The company also adopted new accounting standards related to consolidations and receivables, and implemented a change in estimate for the service lives of certain machinery and equipment assets, which had an immaterial or positive impact on earnings.