Content ID

309900

UPDATE 2-ADM quarterly profit jumps 36% on strong exports, soy crush margins

(Adds segment earnings details, background, adds analyst consensus estimates)

By Karl Plume and Arunima Kumar

Jan 26 (Reuters) - U.S. agricultural commodities trader Archer Daniels Midland Co reported a 36% jump in fourth-quarter profit on Tuesday as strong soy processing margins and solid exports, particularly to China, boosted earnings in its core agricultural services and oilseeds business.

The company projected further profit growth in the year ahead, led by growing global demand for food and feed as the world emerges from the coronavirus pandemic.

"Based on the continued delivery of drivers under our control and improving market conditions as the year progresses, we expect strong growth in segment operating profit and another record year of EPS in 2021," Chief Executive Juan Luciano said.

ADM's results offered the latest look into how the pandemic is impacting the world's largest grain traders.

Despite massive shifts in food and fuel demand as people avoided unnecessary travel and made more meals at home, ADM and rival agribusinesses Bunge, Cargill and Louis Dreyfus - known as the ABCD quartet of grain trading giants - have weathered the pandemic unexpectedly well.

Grain merchants have gained despite rising prices for crops they store, transport and process.

High U.S. crop exports, including record-large corn sales to China, boosted ADM's agricultural services and oilseeds unit, its largest in terms of revenue. A record-high U.S. soybean processing pace and strong margins further lifted results.

ADM's carbohydrate solutions segment gained as pandemic-related consumer demand for hand sanitizer and flour for baking at home offset weak ethanol margins. Once a biofuel pioneer, ADM has idled two of its ethanol-producing corn dry mills as the pandemic curbed fuel demand and eroded margins.

Net earnings attributable to ADM rose to $687 million, or $1.22 per share, in the quarter ended Dec. 31, from $504 million, or 90 cents per share, a year earlier.

Excluding one-time items, ADM earned $1.21 per share, beating analysts' average estimate of $1.10, according to Refinitiv IBES data.

Revenue climbed 10.1% to $17.98 billion, beating expectations for $16.48 billion. (Reporting by Karl Plume in Chicago and Arunima Kumar in Bengaluru; Editing by Shailesh Kuber, Saumyadeb Chakrabarty and Susan Fenton)

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