ADM profit plunges more than 40% on U.S. weather, trade war woes

[August 01, 2019]   By P.J. Huffstutter and Taru Jain

CHICAGO/BENGALURU (Reuters) - U.S. grains merchant Archer Daniels Midland Co <ADM.N> on Thursday reported a 41.3% drop in second-quarter adjusted profit and missed Wall Street expectations, after being battered by the U.S.-China trade war and severe U.S. weather this spring that caused it significant supply-chain woes.

All but one of the company's business units reported a lower profit. It is among the first U.S. agricultural companies to report an impact from African swine fever, a fatal hog disease that has killed millions of pigs in China's domestic herd.

"We are also seeing early signs of how African swine fever might impact global animal protein markets, and eventually support incremental soybean meal demand in key meat-producing regions outside of China," said company Chairman and Chief Executive Juan Luciano.

The company's performance this year so far represents a sharp reversal of fortunes from last year, when ADM's profits surged after a drought in Argentina and the U.S.-China trade dispute boosted its trading and oilseed processing businesses.

Its adjusted net earnings for the quarter fell to $340 million, or 60 cents per share, from $579 million, or $1.02 per share, a year earlier.

Revenue dropped 4.5% to $16.3 billion.

ADM had been expected to earn 61 cents per share, according to the mean Refinitiv estimate from 11 analysts.

(Additional reporting by Taru Jain in Bengaluru; Editing by Anil D'Silva and Steve Orlofsky)

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