Summary
Archer-Daniels-Midland Co. (ADM) reported mixed financial results for the nine months ended March 31, 2012, compared to the same period in the prior year. While net sales increased by 15% to $66.4 billion, driven by higher average selling prices across segments, net earnings attributable to controlling interests saw a significant decline of $716 million, falling to $939 million. This decrease was primarily attributed to lower segment operating profit across all reportable segments and higher corporate expenses, including charges related to a global workforce reduction program and asset impairment and exit costs associated with certain facilities. The company faced challenges in its Corn Processing segment, particularly with weak ethanol margins and asset impairment charges. The Oilseeds Processing segment experienced weaker global oilseed crushing margins, while Agricultural Services saw a decrease in earnings due to weaker international merchandising results and reduced U.S. grain exports. Despite the decline in profitability, ADM maintained a strong liquidity position, with $1.2 billion in cash, cash equivalents, and short-term marketable securities, and an updated accounts receivable securitization program providing additional funding flexibility.
Financial Highlights
50 data points| Revenue | $21.16B |
| Cost of Revenue | $20.15B |
| Gross Profit | $1.01B |
| SG&A Expenses | $402.00M |
| Interest Expense | $116.00M |
| Net Income | $399.00M |
| EPS (Basic) | $0.60 |
| EPS (Diluted) | $0.60 |
| Shares Outstanding (Basic) | 662.00M |
| Shares Outstanding (Diluted) | 663.00M |
Key Highlights
- 1Net sales increased by 15% to $66.4 billion for the nine months ended March 31, 2012, driven by higher average selling prices and increased sales volumes in key segments like Oilseeds Processing and Corn Processing.
- 2Net earnings attributable to controlling interests decreased significantly by $716 million to $939 million for the nine months ended March 31, 2012, compared to the prior year.
- 3The Corn Processing segment experienced a substantial operating profit decrease of $768 million due to asset impairment charges, exit costs from facility closures, and weak ethanol margins.
- 4Oilseeds Processing operating profit decreased by $276 million, mainly due to weak global oilseed crushing margins and a prior year gain on Golden Peanut revaluation.
- 5The company incurred significant asset impairment, exit, and restructuring costs totaling $437 million for the nine months ended March 31, 2012, primarily related to bioplastics business exits and workforce reductions.
- 6Liquidity remains strong with $1.2 billion in cash, cash equivalents, and short-term marketable securities at March 31, 2012, and a current ratio of 1.8 to 1.
- 7ADM amended its accounts receivable securitization program, providing access to up to $1.0 billion in funding.