DECATUR, Ill. (AP) — Archer Daniels Midland's second-quarter net income tumbled 89 percent, the company said Tuesday, weighed down by hefty impairment charges and weakness in its three major segments, oilseeds, corn processing and agricultural services.
The agribusiness conglomerate posted earnings of $80 million, or 12 cents per share, down from $732 million, or $1.14 per share, a year earlier.
Excluding 6 cents per share for a LIFO charge and 33 cents per share in impairment costs, earnings were 51 cents per share, which was still shy of the 76 cents Wall Street was looking for, according to a poll by FactSet.
Shares of Archer Daniels Midland Co. dropped $1.23, or 4.1 percent, to $28.48 in premarket trading on Tuesday.
"The operating environment was challenging. Ongoing weakness in global oilseeds margins, lower results in corn and poor international merchandising results hurt our second quarter profits," Chairman and CEO Patricia Woertz said.
Oilseeds operating profit during the period ended Dec. 31 fell to $253 million, from $325 million. The company also had a $71 million pretax gain in the year-ago quarter, related to buying a controlling stake in Golden Peanut.
Corn processing reported a $133 million operating loss, as it incurred $339 million in asset impairment charges related to a PHA renewable plastic production plant in Clinton, Iowa. Excluding the charges, corn processing operating profit was $206 million.
Agricultural services operating profit sagged to $158 million from $426 million on poor international merchandising results and a drop in U.S. grain exports from the year-ago level.
Revenue increased 11 percent to $23.31 billion from $20.93 billion.
Wall Street forecast revenue of $22.87 billion.
Earlier this month Archer Daniels announced that it planned to cut 1,000 mostly salaried jobs as it navigates volatile global crops markets. The Decatur, Ill. company said that translates to 15 percent of its corporate staff, or about 3 percent of its total workforce. Archer Daniels expects to save about $100 million in annual expenses from the cuts, along with other measures.
The company employs 30,000 people worldwide with corporate offices in Switzerland, Brazil and China.