Oct 29 (Reuters) - Global grains trader Archer Daniels
Midland Co beat Wall Street estimates for quarterly
profits on Thursday, helped by strength in its grain milling and
Still, revenue missed analysts' expectations and net
earnings attributable to the company were 44% lower than a year
earlier. Shares were down nearly 3% in extended trade, after
setting a two-year high last Friday.
ADM said it benefited in the third quarter as North American
demand for starches grew from a year ago and earlier in 2020,
though food-service demand has suffered.
The company and rival grain traders like Bunge have
faced headwinds from the COVID-19 pandemic as shuttered
restaurants and reduced travel disrupted demand for food and
fuel. But the merchants have weathered the crisis better than
other industries as countries around the world are stocking up
on wheat and other staples to ensure supplies.
"Reduced food service demand affected sweetener and flour
volumes, though retail demand for flour remained solid," ADM
Operating profit in ADM's corn and wheat milling business, a
unit known as carbohydrate solutions that includes starches and
sweeteners, rose by 35% from a year ago, to $246 million.
Profit in the nutrition unit jumped 24.6% to $147 million,
while profits in ag services and oilseeds - ADM's biggest
segment - rose 4.6% to $436 million.
Excluding one-time items, the company earned 89 cents per
share, while analysts on average had estimated 71 cents,
according to IBES data from Refinitiv.
Net earnings attributable to ADM fell to $225 million, or 40
cents per share, including a 53-cent per share charge related to
early debt retirement. That was down from $407 million, or 72
cents per share, a year earlier.
Revenue fell to $15.13 billion from $16.73 billion, below
ADM said selling, general, and administrative expenses rose
to $636 million from $578 million last year.
(Reporting by Arundhati Sarkar in Bengaluru and Tom Polansek in
Chicago; Editing by Bernard Orr and Leslie Adler)