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Ganz interessante Zusammenfassung auf www.nasdaq.com: Archer-Daniels-Midland Q4 Profit Up 133% On Asset-sales Gains; Ethanol Volume Down (RTTNews) - Agriculture processor and ethanol producer Archer-Daniels-Midland Co. (ADM) said its net profit for the fourth quarter more than doubled, thanks to gains from asset sales. ADM stock has been down in recent months, on booming ethanol output that created concerns of a supply glut. However, a correction in the stock weakness can be expected now with declining corn prices, a pending favorable energy legislation package, Oil trading close to record highs, the swelling market for grains and seed processing, and the company's recent buy of grain producer Fasco Mills to meet its biofuel, food and feed needs. Net earnings for the quarter rose 133% to $954.76 million or $1.47 per share, from year-ago $410.26 million or $0.62 per share. The latest quarter includes post-tax gains of $616 million related to asset sales, and charges totaling $79 million for asset impairment, LIFO inventory, and debt repurchase. Analysts, whose estimate generally excludes special items, were looking for earnings of 59 cents a share. Net sales for the quarter rose 28% to $12.21 billion from $9.55 billion last year. Segment operating profit for the quarter jumped 81% to $1.15 billion from $637.29 million last year. Profits at the corn processing division that houses the company's cash cows - Ethanol and high-fructose corn syrup or HFCS - declined 16% to $241.32 million from $285.88 million, amid lower ethanol sales volume and higher net corn costs. Over the past few years, ADM - the largest producer of ethanol in the U.S. - has been piggy-backing the exploding demand for Ethanol - an alternative fuel being largely touted as a gasoline substitute. In recent months, ethanol producers have scrambled to ramp up production of the fuel, in view of the boiling oil prices and rich U.S. government subsidies offered for the alternative fuel. The booming ethanol output in turn triggered concerns of a surplus supply of the fuel, pressuring the shares of ethanol producers. Higher corn costs coupled with lower ethanol prices have been also been eating into ethanol producers' profits. On a positive note, ethanol prices have had their biggest decline since 2001, and the fuel is now cheaper than gasoline, thereby offering a compelling price advantage and opening up new incremental demand that may support prices from falling any lower. Even if ethanol fundamentals turn negative, ADM can cushion the fall in prices, as it is a low cost producer and will even be positioned to buy ethanol assets inexpensively compared to competitors. ADM also is geared to benefit from a huge corn crop. In late June, the U.S. Department of Agriculture reported that farmers are planning to sow about 93 million acres of corn in 2007, an increase of 19% from last year. The huge crop is expected to bring down corn prices over the next few months, providing some financial reprieve to ethanol producers. On the day of the news, July contracts for Corn traded at $3.29 per bushel, after hitting $4 a bushel in February. The company has found other measures to tackle higher corn prices. July 27, ADM agreed to acquire Fasco Mills Co., a family-owned grain and feed company. The deal, which is expected to close on Sep 1, will boost the flow of raw materials for its biofuel production. The move will help ADM control future Corn costs, while allowing it to act as a Toll bridge for the Corn supply from the area to other rivals. The company is also seeking to enter the sugar-cane-ethanol business in Brazil. Besides, Ethanol is not the only iron in the fire for ADM. The company processes corn for syrup, starch, and high-fructose sweeteners in addition to ethanol. It also operates oilseed and agricultural services divisions. Quarterly Profits from the company's Oilseeds Processing business - that produces vegetable oil - more than tripled to $587.18 million from $194.67 million last year, aided by a gain on the exchange of the company's interests in certain Chinese joint ventures for shares in Wilmar International Ltd., the largest agricultural processing business in Asia. Excluding this gain, Oilseeds Processing operating profit decreased to $147 million, due to a decline in European rapeseed and biodiesel margins and the absence of a year-ago $27 million gain in Brazilian transactional tax credits. Operating profits at its Agricultural services business for the quarter - nearly tripled to $240.83 million from $83.25 million, which the company attributed to a $153 million gain stemming from the sale of the company's interest in Agricore United. Excluding this gain, Agricultural Services profits for the quarter increased just $5 million to $88 million. At other segments, which include the food, feed, and industrial business, as well as financial operations, quarterly operating profit rose 13% to $83.16 million from $73.48 million, boosted by increased profits from both businesses. Along with other ethanol producers, ADM stands to gain from a pending legislation that analysts expect will contain $15 billion to $20 billion in tax credits for alternative and renewable energy. The bill, yet to be cleared by the House, would also mandate that the use of biofuels climb to 36 billion gallons by 2022. The rising demand for protein in emerging markets and global growth in biofuels, is expected to fuel the market for grains and seed processing, and ADM is positioned to benefit from this fast growing sector. For the full year, the company earned $2.16 billion or $3.30 per share, up 65% from year-ago $1.31 billion or $2 per share. Results for 2007 included $665 million in after-tax gains on asset sales. Revenue for the year rose 20% to $44.02 billion from $36.6 billion last year. ADM stock is a relatively safer bet in ethanol investing, as the company is not a pure ethanol play and has other revenue avenues to cushion a fall. The stock is currently trading down 26 cents or 0.76% at $33.79. |
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| aus der Diskussion: | Lohnt sich ein Investment in Archer-Daniels-Midland Co. zum jetzigen Zeitpunkt noch? |
| Autor (Datum des Eintrages): | ambodenstaendig (30.07.07 23:42:31) |
| Beitrag: | 120 von 186 (ID:30944420) |
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