DECATUR, ILL. — Negative ethanol margins and weaker results in the Agricultural Services segment weighed on full-year earnings at Archer Daniels Midland Co. Net income in the year ended June 30 was $1,223 million, equal to $1.84 per share on the common stock, down 40% from $2,036 million, or $3.13 per share, in fiscal 2011. Net sales were $89,038 million, up 10% from $80,676 million in the same period a year ago.
The decline in full-year earnings in part reflected a challenging fourth quarter in which net income fell 25% to $284 million, or 43c per share, from $381 million, or 58c per share. Net sales in the fourth quarter were narrowly lower, at $22,675 million, which compared with $22,870 million in the same period a year ago.
“In a challenging fourth quarter, solid results from our global oilseeds business, particularly in South America, were more than offset by negative U.S. ethanol margins and weaker U.S. merchandising results,” said Patricia Woertz, chairman and chief executive officer. “As we look ahead, while drought has reduced the potential size of the U.S. corn crop, we are tracking the development of other crops in North America and Europe. While U.S. crop carryouts are expected to be low, we have an experienced business team to manage through this environment.”
Overall operating profit fell 41% in the fourth quarter and 39% in the full year, as the company’s three largest segments posted lower year-over-year results.
The sharpest loss during the year occurred in the Corn Processing segment, where operating profit fell 76% to $261 million from $1,079 million. Net sales in the segment were higher, rising 22% to $12,114 million from $9,908 million. Within the segment, sweeteners and starches profit increased 2% to $335 million while bioproducts sustained a loss of $74 million after posting a profit of $749 million in the fiscal 2011.
ADM’s Oilseeds Processing segment profit fell 23% in the year, easing to $1,302 million from $1,690 million. Sales in the segment rose 16% to $34,715 million.
The company’s Agricultural Services segment suffered a 29% decline in operating profit during fiscal 2011, falling to $947 million from $1,323 million in fiscal 2011. Sales in the segment rose 3% to $42,082 million from $40,750 million.
Beginning in the fourth quarter of fiscal 2012, ADM realigned segment operating profit so that milling results are recorded in the Agricultural Service category under “Milling and Other.” Operating profit of “Milling and Other” totaled $329 million in fiscal 2012, down from $399 million in fiscal 2011.
The ADM Other segment sustained a 62% decline in operating profit in fiscal 2012, falling to $15 million from $39 million. Sales in the segment increased 15% to $127 million from $110 million.
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