[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / August 4, 2016 / Active Wall St. announces its post-earnings coverage on Archer-Daniels-Midland Co. (NYSE:ADM). The company announced its second quarter fiscal 2016 financial results before the opening bell on August 02, 2016. The world's largest corn processor's earnings missed analysts' estimates as merchandising and handling earnings declined in its agriculture services unit. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Reviewed
For the second quarter ended on June 30, 2016, Archer-Daniels-Midland earned $284 million, or $0.48 per share, down from $386 million, or $0.62 per share, in the year ago period. Excluding gains on sales and other special items, earnings per-share declined to $0.41 per share in Q2 FY16 from $0.60 in Q2 FY15. Revenues for Q2 FY16 were $15.63 billion, down 9% from $17.18 billion in the same period a year ago. Analysts projected earnings of $0.45 per share on revenue of $16.97 billion.
"The first half of the year was very challenging," Chief Executive Officer, Juan Luciano, said in the statement, "However, with improved fundamentals, we anticipate a more favorable second half of the year."
Segment Insights
During Q2 FY16, operating profit in Agricultural Services, its biggest revenue contributor, plunged 55.1% to $97 million in Q2 FY16, down from $152 million in the year-ago quarter, owing to compressed margins in the U.S. grain handling network that resulted in soft merchandising and handling earnings seeing a loss of $14 million in the reported quarter compared to a gain of $41 million a year ago. Transportation results declined to $15 million from $19 million in Q2 FY15, due to weak barge demand and lower freight rates.
Archer-Daniels-Midland Corn Processing segment's operating profit increased to $219 million in Q2 FY16 from $204 million in the year ago period. Within the segment, sweeteners and starches results increased to $182 million from $145 million in the year ago period on improved margins from optimizing product grind in the company's corn wet mills. The segments results were also aided by the better than planned integration of the recent Eaststarch and Morocco acquisitions.
In the company's Oilseeds division, operating profit was $234 million for Q2 FY16, down from $344 million in the year earlier period, as operating profit in its crushing and origination unit tumbled 32%. This was slightly offset by a marginal improvement in Asian oilseeds results. Refining, packaging, biodiesel, and other results declined 18% primarily due to biodiesel timing effects.
Other Developments
In May 2016, Archer-Daniels-Midland, continuing on its strategic plan, acquired Amazon Flavors, a Brazilian manufacturer of natural extracts, emulsions and compounds. Moreover, the company further expanded its facility at Straubing, Germany, by adding soybean crushing capability to it. Additionally, the company increased its ownership stake in Wilmar to 22% from 20%, boosting its Asian operations.
Share Repurchase & Dividend
During the first half of 2016, Archer-Daniels-Midland has returned $0.8 billion to shareholders in the form of share repurchases and dividend payments. During the same time frame, Archer-Daniels-Midland bought back shares worth $487 million.
On August 03, 2016, Archer-Daniels-Midland Board of Directors declared a cash dividend of $0.30 per share on the company's common stock payable on September 7, 2016, to shareholders of record on August 17, 2016. This is ADM's 339th consecutive quarterly payment, a record of 84 years of uninterrupted dividends.
Stock Performance
On Wednesday, August 03, 2016, Archer-Daniels-Midland's shares finished the day at $43.93, up by 1.10%, with a total of 3.18 million shares changing hands. The company's stock price has surged 33.63% in the past six months.
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