Archer Daniels Midland Reports Third Quarter Results

    DECATUR, Ill., May 1 /PRNewswire-FirstCall/ -- Archer Daniels Midland
 ( ADM)
     -- Net earnings for the quarter ended March 31, 2007 increased 4 % to
        $ 363 million -- $ .56 per share from $ 348 million -- $ .53 per share
        last year.  Net earnings for the quarter ended March 31, 2007 includes
        a gain of $ 33 million realized on the sale of the Company's Arkady
        food ingredient business.
 
         "We performed well in a challenging quarter," said ADM Chairman and
         CEO Patricia A. Woertz.  "We are particularly pleased with continued
         strong performance in our corn processing segment.  Our results also
         benefited from actions to strategically align our portfolio and our
         outlook on future opportunities remains quite strong."
 
     -- Third quarter segment operating profit increased 8 % to $ 593 million
        from $ 549 million last year.
 
       -- Oilseeds Processing operating profit decreased due to lower softseed
          and biodiesel processing margins.
       -- Corn Processing operating profit increased due to lower operating
          costs and increased ethanol and sweetener selling prices partially
          offset by increased net corn costs.
       -- Agricultural Services operating profit decreased due to lower global
          merchandising and handling results.
       -- Other segment operating profit increased due to a gain realized upon
          the sale of the Arkady food ingredient business.
 
     -- Financial Highlights
        (Amounts in thousands, except per share data and percentages)
 
                         THREE MONTHS ENDED             NINE MONTHS ENDED
                                            %                               %
                   3/31/07     3/31/06    CHANGE   3/31/07     3/31/06   CHANGE
     Net sales
      and other
      operating
      income    $11,381,150  $9,122,841      25%  $31,804,11  $27,048,775   18%
     Segment
      operating
      profit       $593,135    $549,492       8%  $2,008,106  $ 1,423,905   41%
     Net
      earnings     $362,891    $347,796       4%  $1,206,904  $   901,811   34%
     Earnings
      per
      share        $    .56    $    .53       6%  $     1.83  $      1.38   33%
     Average
      number of
      shares
      outstanding   653,177     657,130     (1)%     658,232      655,469    -
     Discussion of Operations
     Net earnings for the quarter ended March 31, 2007 were $ 363 million,
 or $ .56 per share, compared to $ 348 million, or $ .53 per share, last
 year. Net earnings for the nine months ended March 31, 2007 were $ 1.2
 billion, or $ 1.83 per share, compared to $ 902 million, or $ 1.38 per
 share, last year.
     Segment operating profit increased $ 44 million to $ 593 million for
 the quarter and increased $ 584 million to $ 2 billion for the nine months.
     Oilseeds Processing operating profits decreased $ 8 million to $ 169
 million for the quarter and increased $ 126 million to $ 530 million for
 the nine months. Improved gross margins in all geographic regions for the
 nine months contributed to the increase although the current quarter
 declined on reduced softseed and biodiesel processing margins. Results for
 the quarter and nine months ended March 31, 2006 included a $4 million
 charge for abandonment and write down of long lived assets.
     Corn Processing operating profits increased $ 33 million to $ 252
 million for the quarter and increased $ 286 million to $ 878 million for
 the nine months. Lower operating costs and increased starch, sweetener and
 ethanol selling prices contributed to the earnings improvement and were
 partially offset by increasing net corn costs. Fiscal 2006 third quarter
 results included a gain of $ 8 million upon the sale of a citric acid
 plant. Fiscal 2006 nine months included a charge of $ 14 million (net of
 the $ 8 million gain) related to the closure of this citric acid plant.
     Agricultural Services operating profits decreased $ 38 million to $ 41
 million for the quarter due to a $ 39 million decrease in global
 merchandising and handling results. For the nine months, operating profits
 increased $ 82 million to $ 275 million due principally to improved
 earnings of global merchandising and handling operations and improved
 operating results of transportation operations.
     Other segment operating profit increased $ 57 million to $ 132 million
 for the quarter and increased $ 89 million to $ 325 million for the nine
 months principally due to a gain of $ 53 million realized upon the sale of
 the Company's Arkady food ingredient business. Fiscal 2006 third quarter
 and nine month results included $ 15 million of cost related to the sale
 and discontinuance of the Irish feed business. Results for the nine months
 ended March 31, 2006 also included a $ 32 million asset impairment charge.
     Significant components of Corporate results are as follows:
 
 
                                Three months ended         Nine months ended
                                    March 31,                   March 31,
                               2007          2006         2007           2006
                                                 (in millions)
 
 
     LIFO income (charge)     $ (23)         $  1        $(146)         $  13
     Investment income
      (expense)                  22            (6)          52            (23)
     Gain on security
      transactions                9             -           11             29
     Brazilian
      transactional
      tax credit                  -             -            -             19
     Corporate costs            (51)          (51)        (169)          (178)
     Other                        6            (1)           4            (11)
       Total Corporate        $ (37)         $(57)       $(248)         $(151)
     Results for the nine months ended March 31, 2006 included a $ 36
 million tax credit related to the adjustment of state and federal income
 taxes.
     Conference Call Information
     Archer Daniels Midland will host a conference call and audio Web cast
 to discuss third quarter results and provide a Company update at 8:00 a.m.
 Central Daylight Time (CDT) on Tuesday, May 1, 2007. To listen by phone,
 dial 866-543-6403 or 617-213-8896; the access code is 45110940. Digital
 replay of the call will be available beginning on May 1, 2007 from 10:00
 a.m. CDT and ending on May 8, 2007. To access this replay, dial
 888-286-8010 or 617-801-6888 and enter access code: 35594026. In addition,
 a financial summary slide presentation will be available to download
 approximately 60 minutes prior to the start of the call. To listen to the
 call and to download the financial summary presentation via the Internet,
 go to: http://www.admworld.com/webcast/. A replay of the Web cast will be
 available on the ADM World Website.
     Archer Daniels Midland Company (ADM) is the world leader in BioEnergy
 and has a premier position in the agricultural processing value chain. ADM
 is one of the world's largest processors of soybeans, corn, wheat and
 cocoa. ADM is a leading manufacturer of biodiesel, ethanol, soybean oil and
 meal, corn sweeteners, flour and other value-added food and feed
 ingredients. Headquartered in Decatur, Illinois, ADM has over 26,000
 employees, more than 240 processing plants and net sales for the fiscal
 year ended June 30, 2006 of $37 billion. Additional information can be
 found on ADM's Web site at http://www.admworld.com/.
                         ARCHER DANIELS MIDLAND COMPANY
                      CONSOLIDATED STATEMENTS OF EARNINGS
                                  (unaudited)
 
                               Three months ended        Nine months ended
                                    March 31,                 March 31,
                                2007        2006          2007        2006
                                   (in thousands, except per share amounts)
 
 
     Net sales and other
      operating income      $11,381,150  $9,122,841  $31,804,111  $27,048,775
     Cost of products sold   10,635,240   8,352,109   29,284,703   24,911,864
      Gross profit              745,910     770,732    2,519,408    2,136,911
     Selling, general and
      administrative
      expenses                  294,037     297,295      902,083      896,142
     Other (income)
      expense - net            (104,331)    (19,526)    (142,859)     (32,630)
     Earnings before
      income taxes              556,204     492,963    1,760,184    1,273,399
     Income taxes               193,313     145,167      553,280      371,588
       Net earnings            $362,891    $347,796   $1,206,904  $   901,811
     Diluted earnings
      per common share         $    .56    $    .53   $     1.83  $      1.38
     Average number of
      shares outstanding        653,177     657,130      658,232      655,469
 
     Other (income) expense - net consists of:
      Interest expense         $115,467     $90,446     $323,589  $   263,344
      Investment income         (66,352)    (48,295)    (191,683)    (146,143)
      Net (gain) loss on
       marketable securities
       transactions             (13,484)        282      (24,244)     (27,952)
      Equity in earnings of
       unconsolidated
       affiliates               (84,975)    (54,930)    (207,576)    (113,604)
      Other - net               (54,987)     (7,029)     (42,945)      (8,275)
                              $(104,331)   $(19,526)  $ (142,859) $   (32,630)
 
     Operating profit by segment is as follows:
     Oilseeds Processing(1)    $168,516    $176,550    $ 530,166  $   403,742
     Corn Processing
       Sweeteners and
        Starches                126,636     113,223      385,738      319,747
       Bioproducts(2)           125,176     105,469      492,032      271,735
         Total Corn
         Processing(2)          251,812     218,692      877,770      591,482
     Agricultural Services       40,540      78,601      274,675      192,216
     Other
      Food, Feed &
        Industrial(1)(3)         97,328      34,764      188,706      138,895
      Financial                  34,939      40,885      136,789       97,570
        Total Other(1)(3)       132,267      75,649      325,495      236,465
     Total segment
      operating profit          593,135     549,492    2,008,106    1,423,905
     Corporate(4)               (36,931)    (56,529)    (247,922)    (150,506)
     Earnings before
      income taxes             $556,204    $492,963  $ 1,760,184   $1,273,399
 
     (1) Fiscal 2006 third quarter results include a charge for the abandonment
         and write down of long-lived assets of $ 4 million in Oilseeds
         Processing. Fiscal 2006 nine month results include a charge for the
         abandonment and write down of long-lived assets of $ 4 million in
         Oilseeds Processing and $ 32 million in Food, Feed and Industrial.
     (2) Fiscal 2006 included a gain of $ 8 million in the quarter and a $ 14
         million net charge for the nine months related to a closure and sale
         of a citric acid plant.
     (3) Fiscal 2007 third quarter and nine months results includes a gain of
         $ 53 million realized upon the sale of the Company's Arkady food
         ingredient business.  Fiscal 2006 third quarter and nine months
         included $ 15 million of cost related to the sale and discontinuance
         of the Irish feed business.
     (4) Includes LIFO charge of $ 23 million for the quarter and $ 146 million
         for the nine months ended March 31, 2007. Includes LIFO income of
         $ 1 million for the quarter and $ 13 million for the nine months ended
         March 31, 2006.
 
 
 
                         ARCHER DANIELS MIDLAND COMPANY
                         SUMMARY OF FINANCIAL CONDITION
                                  (unaudited)
 
                                              March 31, 2007    June 30, 2006
                                                       (in thousands)
 
     NET INVESTMENT IN
 
      Working capital                            $8,156,443        $6,290,697
      Property, plant and equipment               5,822,959         5,293,032
      Investments in and
       advances to affiliates                     2,050,740         1,985,662
      Long-term marketable securities             1,175,227         1,110,177
      Other non-current assets                    1,059,132         1,053,882
                                                $18,264,501       $15,733,450
 
     FINANCED BY
      Short-term debt                            $1,142,765          $549,419
      Long-term debt, including
       current maturities                         5,229,147         4,130,091
      Deferred liabilities                        1,213,240         1,247,060
      Shareholders' equity                       10,679,349         9,806,880
                                                $18,264,501       $15,733,450
 
 
 
     SUMMARY OF CASH FLOWS
     (unaudited)
                                                        Nine Months Ended
                                                             March 31,
                                                      2007             2006
                                                          (in thousands)
 
     Operating activities
 
      Net earnings                               $1,206,904         $901,811
      Depreciation                                  519,776          490,780
      Asset abandonments                              1,393           27,013
      Other - net                                     4,014         (268,700)
      Changes in operating assets
       and liabilities                           (1,766,382)        (251,224)
         Total Operating Activities                 (34,295)         899,680
     Investing Activities
       Purchases of property,
        plant and equipment                        (843,592)        (533,494)
       Net assets of businesses acquired            (92,372)        (168,520)
       Other investing activities                   (14,475)        (182,293)
         Total Investing Activities                (950,439)        (884,307)
 
     Financing Activities
       Long-term borrowings                       1,165,633          603,874
       Long-term debt payments                     (131,360)        (262,042)
       Net borrowings under lines of credit         570,315          196,982
       Purchases of treasury stock                 (532,851)             (74)
       Purchase of convertible note hedge          (299,460)               -
       Sale of stock warrants                       170,085                -
       Cash dividends                              (206,543)        (176,433)
       Other - net                                   32,588           18,128
         Total Financing Activities                 768,407          380,435
     Increase (decrease) in cash
      and cash equivalents                         (216,327)         395,808
     Cash and cash equivalents
      beginning of period                         1,112,853          522,420
     Cash and cash equivalents
      end of period                                $896,526         $918,228
 
 

SOURCE Archer Daniels Midland Company