Agribusiness conglomerate Archer Daniels Midland Co. said Tuesday its fiscal fourth-quarter earnings fell 15 percent as a higher tax rate and inflated corn prices offset surging revenue.
The Decatur, Ill., company earned $381 million, or 58 cents per share. That compares with $446 million or 69 cents per share in the second quarter of 2010.
Revenue leaped 46 percent to $22.87 billion from $15.7 billion.
The results surprised Wall Street. Analysts expected a profit of 85 cents per share on revenue of $19.55 billion, according to FactSet. Shares fell $1.88, or 6.2 percent, to $28.60.
The company's operating profit improved in every unit except corn processing. The unit's growth was hampered by significantly higher corn costs _ corn futures traded in Chicago have risen about 70 percent over the past 12 months. Soybeans futures are up 34 percent.
For a company like ADM, the volatile prices can be both good and bad. The company sells and ships grain, so it can benefit from higher prices. But it also has to buy huge quantities of grain to make processed food ingredients and additives, and higher prices eat into profit.
Oil seeds processing operating profit rose by $20 million to $379 million. Its agricultural services segment operating profit rose by $15 million to $193 million. At ADM's other business units, which include wheat milling, cocoa processing and shares in joint ventures, operating profit jumped by $76 million to $198 million.
ADM said its taxes more than tripled to $385 million. That was due to some one-time items and changes in the company's geographic focus. That more than offset an $89 million increase in operating profit. The company expects its tax rate to fall from about 50 percent in the fiscal fourth-quarter to between 28 and 30 percent for fiscal 2012.
For all of fiscal 2011, ADM earned $2.03 billion, or $3.13 per share, compared with $1.93 billion, or $3 per share in fiscal 2011.
Revenue rose to $80.67 billion from $61.68 billion the year before.
The company says that global protein meal and vegetable oil demand is continuing to grow, while industry margins remain under pressure. Export demand continues to drive strong U.S. corn sweetener volumes, ADM said and ethanol consumption in the U.S. is maxed out.