ADM: Adjusted EPS up 72 percent in Q3/2014

Chicago / IL. (adm) Archer Daniels Midland Company (ADM) reported financial results for the quarter ended September 30, 2014. The company reported adjusted earnings per share1 of 0.81 USD, up from 0.47 USD in the same period last year. Adjusted segment operating profit was 914 million USD, up 45 percent from 632 million USD in the year-ago period. Net earnings for the quarter were 747 million USD, or 1.14 USD per share, and segment operating profit1 was 1.07 billion USD.

«The team delivered very strong results in the third quarter and made significant progress improving earnings and returns», said ADM Chairman and CEO Patricia Woertz. «Corn Processing managed their product mix to serve good demand and optimize margins. Continued improvement in international merchandising results supported the ongoing recovery of Ag Services. And Oilseeds Processing again delivered solid results overall, benefiting from good demand and its diverse footprint and product portfolio».

«We also continued to advance our portfolio management. Since the beginning of the third quarter, we signed a deal to sell our global chocolate business; we reached an agreement to acquire Specialty Commodities Incorporated; and we completed our acquisition of Wild Flavors. In mid-October, we completed our previously announced buyback of 18 million shares, ahead of our year-end target. Given the strength of our balance sheet and our strong cash flows, we expect to repurchase up to ten million more shares by the end of 2014».

Third Quarter 2014 Highlights

  • Adjusted EPS of 0.81 USD excludes approximately 315 million USD in pre-tax LIFO income; a 156 million USD pre-tax gain on the expansion of the ADM-Marubeni joint venture; and a 102 million USD pre-tax loss on foreign exchange hedging of the Wild Flavors equity purchase. As a result of Euro depreciation, and net of these hedging losses, ADM´s purchase price of the Wild Flavors equity was 114 million USD below the price at signing.
  • Oilseeds Processing was in line with last year´s solid result, with the impact from slower farmer selling in South America offset by stronger global softseed, soybean and biodiesel results.
  • Corn Processing increased 176 million USD on improved margins in ethanol and sweeteners.
  • Agricultural Services increased 57 million USD, with improvements in international merchandising and transportation.
  • Trailing four-quarter-average adjusted ROIC was 8.5 percent, up 280 basis points year over year.
  • The net debt position of the company declined to 0.7 billion USD, compared with 3.4 billion USD at the end of the same period last year, which also resulted in a lower net interest expense.
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