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Archer Daniels reports lag in 4Q earnings, shares down 5 pct

Shares in Archer Daniels slide after the company reported lower-than-expected profits due to higher costs and a trade dispute with China that's dragged commodities prices down

Associated Press

CHICAGO (AP) -- Shares in Archer Daniels Midland slid 5 percent after the company reported lower-than-expected profits as costs rise and a trade dispute with China drags on the price of commodities.

The Chicago company reported fourth-quarter profit of $315 million, down sharply from the $788 million profit n the same quarter last year when it benefited from the Trump administration's tax overhaul.

Archer Daniels Midland Co. had profit of 56 cents per share, or 88 cents per shares when one-time gains and costs are removed.

Industry analysts had been projecting a per-share profit of 92 cents, according to a survey by Zacks Investment Research.

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The agribusiness giant posted revenue of $15.95 billion, down from last year's fourth-quarter revenue of $16.07 billion.

ADM reported "extremely small volumes" of soybean exports to China since tariffs were imposed, but said more corn and soybeans are being exported to other countries, which improved export margins.

Before the U.S.-China trade dispute started last year, China bought nearly 60 percent of the soybeans the United States exported. But in the first 10 months of 2018, U.S. soybean exports to China fell by 62 percent, according to the U.S. Department of Agriculture. That inventory of unsold soybeans has brought prices down.

Results for the full year were more positive as ADM reported profit of $1.81 billion, or $3.19 per share. That's up from 2017's $1.59 billion and $2.79 per share. Revenue was also up for 2018 at $64.34 billion, compared with $60.82 billion in 2017.

ADM shares are up about 4 percent since the beginning of the year. That follows a steep decline in the fall when shares slid from more than $51, to less than $40 as the U.S.-China conflict came to a head.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ADM at https://www.zacks.com/ap/ADM