Archer Daniels Midland (ADM) Crunched on Earnings Miss

Shares of Archer Daniels Midland (NYSE:ADM) got hammered Tuesday, dropping over 4 percent (including after hours trading), as higher corn prices weighed on the company's performance in the last quarter.

Other notable factors having a significant impact were miniscule margins for oilseed processing, as well as the changing global supply market for grains.

For the latest quarter, net income plummeted to $80 million, or 12 cents a share, a dramatic fall of 89 percent from last year in the same quarter, where the company generated a net income of $732 million, or $1.14 a share.

Taking into account one-off events, earnings came in at 51 cents a share, down by 58 percent over last year.

Profits for its agricultural services business were under heavy pressure for the quarter, dropping 63 percent, with the company citing “poor international merchandising results and lower US export volumes.” That particular unit acquires grain from exporters and sells it to importers.

Recognizing the ongoing challenges, early in January 2012, Archers Daniels Midland said it's going to lay off 1,000 workers.

ADM closed Tuesday at $28.63, falling $1.08, or 3.64 percent.

Archer Daniels Midland (ADM) Ratings Reiterated

Archer Daniels Midland Company (NYSE: ADM) had its “Neutral” rating reiterated by Goldman Sachs (NYSE:GS).

Looking forward to the release of its quarterly report on January 31, 2012, analysts' consensus is for earnings to drop to 78 cents a share, from $1.14 a share last year in the same quarter.

Earnings are expected to come in at $2.98 a share for the fiscal year. Revenue for the year is estimated to be $89.56 billion. Quarterly revenue is estimated at $23.1 billion, a gain of 10.4 percent over last year.

The majority of analysts recommend for investors to hold on ADM. Over the last quarter sentiment on the company has improved a little.

Archer Daniels Midland closed Thursday at $29.84, dropping $0.24, or 0.80 percent.

Archer Daniels Midland (NYSE:ADM) To Grow Through Acquisitions

According to Archer Daniels Midland (NYSE:ADM), they've maintained a strong balance sheet in order to be ready for opportunities for a merger or acquisition, their preferred means of growth in the near future.

ADM has been struggling, as their recent quarterly report shows, with sweeteners and starches falling in price, and ethanol and corn syrup expected to continue dropping in price as well.

This is why they are focusing on growth through acquisition, as organic growth looks like it won't be happening until demand turns around.

Corn Products International Raises Guidance for Year

Corn Products International (CPO) has raised its guidance for the year based on a good third quarter.

The original guidance from the company was for between $3.15 to $3.25 a share, which now has been revised upward to $3.40 to $3.60 a share. Analysts were looking for around $3.29 a share.

Profits for the quarter increased to $88.1 million, or $1.15 a share, from last year's $51.1 million, or 66 cents a share. That growth of 72 percent.

Revenue for the quarter came in at $1.16 billion, up from $938.7 million during the same period last year; a 23 percent increase.

Similar to Archer Daniels Midland (ADM), less international exposure helped them in relationship to currency exchange rates.

Later this year the company will be taken over by Bunge LTD (BG). The date has been moved back to December from November, as the economic crisis has driven the prices of the two companies down by half or more.