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Archer Daniels Midland Fourth Quarter Earnings
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ADM
Archer Daniels Midland (NYSE:ADM) announced its results for the most recent quarter on July 31, 2012. Archer Daniels Midland processes feedstuffs including oilseeds, cocoa, corn, and wheat. The company also manufactures vegetable oil and protein meal, corn sweeteners, flour, ethanol, biodiesel, and other food and feed ingredients.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Archer Daniels Midland's revenues topped expectations, though the company's EPS fell short of predictions. The company reported 43 cents per share versus the 65 cents per share estimate and revenues of $22.68 billion versus the $21.38 billion estimate. Revenue fell 0.9% from the same period last year while EPS is down 25.9%. Slumping revenue in the last quarter ends Archer Daniels Midland's streak of four consecutive quarters of revenue increases. Archer Daniels Midland's net income for the fourth quarter fell 25.5% from last year's figures to $284 million. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 31% in the third quarter and 89.1% in the second quarter.
Management Quote: "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 ADM Chairman and CEO Patricia Woertz.
A Look Back: Gross margins fell 1.2 percentage points to 3.6%. The contraction appeared to be driven by falling revenue, as the figure fell 0.9% from the year earlier while costs rose 0.4%.
Looking Ahead: Over the last 30 days, analysts have not been optimistic about the company's next-quarter performance. The average estimate for the first quarter of the next fiscal year is now 67 cents per share, down from 72 cents. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $2.56 a share to $2.48 over the last 30 days.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Archer Daniels Midland's revenues topped expectations, though the company's EPS fell short of predictions. The company reported 43 cents per share versus the 65 cents per share estimate and revenues of $22.68 billion versus the $21.38 billion estimate. Revenue fell 0.9% from the same period last year while EPS is down 25.9%. Slumping revenue in the last quarter ends Archer Daniels Midland's streak of four consecutive quarters of revenue increases. Archer Daniels Midland's net income for the fourth quarter fell 25.5% from last year's figures to $284 million. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 31% in the third quarter and 89.1% in the second quarter.
Management Quote: "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 ADM Chairman and CEO Patricia Woertz.
A Look Back: Gross margins fell 1.2 percentage points to 3.6%. The contraction appeared to be driven by falling revenue, as the figure fell 0.9% from the year earlier while costs rose 0.4%.
Looking Ahead: Over the last 30 days, analysts have not been optimistic about the company's next-quarter performance. The average estimate for the first quarter of the next fiscal year is now 67 cents per share, down from 72 cents. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $2.56 a share to $2.48 over the last 30 days.
by
Investopedia Staff
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