Agribusiness giant Archer Daniels Midland (ADM) has reported lower-than-expected profits because of a drop in earnings from agricultural services and wheat and cocoa processing.
ADM’s earnings fell 61 per cent to $372 million, or 58 cents a share in the fourth quarter that ended June 30, compared to $954 million or $1.47 a share a year earlier.
The earnings miss, combined with a drop in crude oil prices, sent ADM shares to their lowest point in more than two years. Market analysts say this could worsen jitters for investors who are already worried about agriculture.
ADM shares have fallen more than 40 per cent this year. Investors were concerned that record corn prices would erode profitability at the company’s ethanol plants and that there is a possibility the U.S. government may reduce incentives to produce alternative fuels from crops due to rising food prices.
ADM shares closed August 5 down 5.6 per cent, at $25.87.