ADM's Amazing Quarter

4 Feb 7:37am
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Archer Daniels Midland (ADM) reported this mornings and announced record earnings and said revenues increased 50%.

"ADM's record earnings for the second quarter and first half of fiscal 2008 demonstrate the value created by and the strengths of our broadly diversified asset base and product portfolio," said Patricia Woertz, chairman and CEO. "This quarter, heightened demand, coupled with geographic crop imbalances, drove volumes, prices and
volatility in many key markets. Our team's skill in managing both risk and rapidly changing market opportunities, enabled us to deliver outstanding value for our shareholders."

Second quarter segment operating profit increased 25 % to $ 955 million from $ 767 million last year.
* Oilseeds Processing operating profit increased on improved margin conditions due to strong protein and oil demand.
* Agricultural Services results increased $ 184 million for the quarter and $ 298 million for the six months due principally to improved global merchandising and handling results as volatile commodity market conditions,
* Other segment operating profit increased primarily due to improved results of wheat and malt processing operations and increased financial services income.
* For the six months, Sweeteners and Starches operating profit increased $ 40 million due principally to favorable risk management results.
* Bioproducts results declined $ 56 million for the quarter and $ 137 million for the six months due principally to higher net corn costs and lower ethanol selling prices partially offset by increased ethanol sales volumes and favorable risk
management results.
* LIFO charges exploded from ($105) to ($270) in the quarter.
* The company repurchased 2% of outstanding shares during the quarter.

Lots of questions for the call today. These from Friday and some new ones:

* LIFO, is the increase we saw going to stabilize or hopefully decrease?
* Ethanol pricing, has it stabilized and what does 2008 look like?
* HFCS, with the Mexican market opening fully in 2008, guidance?
* Repurchases, will the current trend continue?

Can't wait to here the answers...

Disclosure ("none" means no position):Long ADM

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ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.