Archer Daniels Midland Company Reports Operating Results (10-Q)
Archer-daniels Midland Company has a market cap of $17.82 billion; its shares were traded at around $26.6 with a P/E ratio of 12 and P/S ratio of 0.2. The dividend yield of Archer-daniels Midland Company stocks is 2.6%. Archer-daniels Midland Company had an annual average earning growth of 10.5% over the past 10 years. GuruFocus rated Archer-daniels Midland Company the business predictability rank of 3-star.
Highlight of Business Operations:The Company has consolidated subsidiaries in over 75 countries. For the majority of the Company s subsidiaries located outside the United States, the local currency is the functional currency. Revenues and expenses denominated in foreign currencies are translated into U.S. dollars at the weighted average exchange rates for the applicable periods. For the majority of the Company s business activities in Brazil, the functional currency is the U.S. dollar; however, certain transactions, including taxes, occur in local currency and require conversion to the functional currency. Fluctuations in the exchange rates of foreign currencies, primarily the Euro, British pound, Canadian dollar, and Brazilian real, as compared to the U.S. dollar can result in corresponding fluctuations in the U.S. dollar value of revenues and expenses reported by the Company.
Net earnings attributable to controlling interests decreased $278 million to $182 million due to a $223 million decrease in segment operating profit and changes in LIFO inventory valuations partially offset by lower income tax expense. Segment operating profit this quarter includes a $146 million impairment charge related to the Company s planned divestment of its equity method investments in Gruma and Gruma-related joint ventures. LIFO inventory charges this quarter were $53 million from the effect of increasing agricultural commodity prices on LIFO inventory valuation reserves, compared to credits of $126 million in the first quarter of fiscal 2012 caused by decreasing agricultural commodity prices.
Corporate results were a loss of $203 million this quarter compared to a loss of $61 million last year. The effects of changing commodity prices on LIFO inventory valuations resulted in a charge of $53 million compared to a credit of $126 million for the prior year quarter. Corporate interest expense - net increased $9 million mostly due to the absence of interest income received in the prior year s quarter related to a contingent gain settlement. Unallocated corporate costs were lower primarily due to lower employee and employee benefit-related costs and administrative expenses. The increase in other income is primarily due to improved earnings from corporate investments.
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