Archer Daniels Midland (NYSE:ADM) reported Tuesday third-quarter earnings dropped 31 percent as its margins were pressured, especially in ethanol and European oilseeds.
The Decatur, Illinois-based company processes oilseeds, corn, wheat and other agricultural commodities and also makes vegetable oil, corn sweeteners and other feed ingredients.
Earnings slumped 31 percent to $399 million, or 60 cents a share, for the three months that ended March 31. That compared to $578 million, or 86 cents a share, a year earlier.
Stripping away restructuring costs and other one-time items, the company earned 78 cents a share, well above analyst estimates for 60 cents a share.
Revenue grew to $21.1 billion from $20 billion, but lagged behind analyst estimates for $21.6 million in sales, according to Bloomberg.
"This quarter, we delivered very good results despite difficult margin environments, particularly in ethanol and European oilseeds," chief executive Patricia Woertz said in a statement.
"The strong third quarter last year set a high bar, and this quarter represents a solid performance by the team."
The oilseeds processing unit – which processes oilseeds like soybeans, sunflower seed and canola – saw sales rise by 14 percent to $7.04 billion. Processing volumes edged up 6.1 percent. The unit’s operating profit, however, shrank to $395 million from $512 million a year ago.
At its corn processing business, the company reported sales of $2.83 billion, up from $2.4 billion. Volumes rose 9.6 percent.
Its agricultural services division posted relatively flat sales of $9.82 billion from $9.87 billion.
Overall, gross margins fell to 4.7 percent from 5.7 percent in the same period last year.
Shares were up five percent Tuesday Morning, reaching $32.37 each in trade on the New York Stock Exchange.