Archer-Daniels-Midland Co. (ADM), the world’s largest corn processor, reported first-quarter profit that missed analysts’ estimates as U.S. crop supplies declined after last year’s drought.
Net income fell to $269 million, or 41 cents a share, from $399 million, or 60 cents, a year earlier, the Decatur, Illinois-based company said today in a statement. Profit excluding inventory costs and provisions made in connection with a bribery investigation was 48 cents, compared with the 50-cent average of nine estimates compiled by Bloomberg.
Sales increased to $21.7 billion from $21.2 billion, compared with the $21.6 billion average of seven estimates.
“This was a challenging quarter, with agricultural services negatively impacted by the ongoing effects of last summer’s U.S. drought,” Chairman and Chief Executive Officer Patricia Woertz said in the statement.
ADM processes grains including corn into ethanol and sweeteners, and soybeans into animal feed and oil, as well as trading and transporting agricultural commodities. Smaller crops have reduced the volumes processed at its plants and raised costs. U.S. farmers in 2012 reaped the smallest corn crop in six years amid the worst drought since the 1930s. Soybean output fell for a third straight year, according to Department of Agriculture data.
The company said in November it was in talks with the Department of Justice and Securities and Exchange Commission over possible violation of the U.S. Foreign Corrupt Practices Act. ADM said today it expects a resolution to the discussions this year and made a $25 million provision to cover potential assessments that may be imposed.
ADM fell 1.7 percent to $33.01 in New York at 5:18 p.m. after regular trading ended.
The company will say whether it will move forward with its bid to buy Australia’s GrainCorp Ltd. (GNC) before the end of its first-quarter earnings call later today, according to ADM. The company said April 25 it won agreement to buy the Australian crop handler for A$2.2 billion ($2.3 billion).
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