(Reuters) - Archer Daniels Midland Co beat quarterly profit estimates on Wednesday as the global grains trader was helped by strength in its ag services and oilseeds and nutrition businesses.
The Chicago-based company said operating profit in the ag services and oilseeds segment - its biggest - rose 1.2% to $422 million in the first quarter, while profit in the nutrition unit jumped 75.3%.
ADM and its peers such as Bunge Ltd, Cargill Inc have been looking to move away and shed lower-margins assets as they suffer through a prolonged crop supply glut. The companies have also been focused on investing in potential high-margins businesses such as specialty food ingredients and flavorings.
ADM’s first-quarter results cover a time when the coronavirus pandemic was beginning to rapidly spread across the U.S., but not the more recent weeks when oil futures plunged into the negative.
The results also offer the first look at how the pandemic is impacting the world’s largest grain traders, as global food supply chains are breaking, U.S. meat plants are shuttering, farmers forced to destroy their crops and animals, and thousands of U.S. meat and food-processing workers have been infected with the coronavirus.
Net earnings attributable to ADM rose to $391 million, or 69 cents per share, in the quarter ended March. 31, from $233 million, or 41 cents per share, a year earlier.
On an adjusted basis, the company reported a profit of 64 cents per share, beating analysts’ average estimates of 55 cents, according to IBES data from Refinitiv.
ADM’s revenue fell 2.2% to about $15 billion.
Reporting by Shanti S Nair in Bengaluru and P.J. Huffstutter in Chicago; Editing by Shounak Dasgupta and Maju Samuel