Archer Daniels First Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Archer Daniels (NYSE:ADM) will unveil its latest earnings on Tuesday, October 30, 2012. Archer Daniels Midland processes feedstuffs including oilseeds, cocoa, corn, and wheat. The company also manufactures vegetable oil and protein meal, corn sweeteners, flour, ethanol, biodiesel, and other food and feed ingredients.

Archer Daniels Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 46 cents per share, a decline of 32.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 64 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 50 cents during the last month.

Past Earnings Performance: The company fell short of estimates last quarter after topping forecasts the quarter prior. In the fourth quarter of the last fiscal year, it reported profit of 38 cents per share against a mean estimate of 62 cents. Two quarters ago, it beat expectations by 8 cents with net income of 68 cents.

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A Look Back: In the fourth quarter of the last fiscal year, profit fell 25.5% to $284 million (43 cents a share) from $381 million (58 cents a share) the year earlier, missing analyst expectations. Revenue fell 0.9% to $22.68 billion from $22.87 billion.

Stock Price Performance: Between October 18, 2012 and October 24, 2012, the stock price dropped $2.14 (-7.4%), from $29.07 to $26.93. The stock price saw one of its best stretches over the last year between September 28, 2012 and October 8, 2012, when shares rose for seven straight days, increasing 4.2% (+$1.14) over that span. It saw one of its worst periods between June 15, 2012 and June 26, 2012 when shares fell for eight straight days, dropping 9% (-$2.82) over that span.

Analyst Ratings: There are mostly holds on the stock with five of nine analysts surveyed giving that rating.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 30.4% in the first quarter of the last fiscal year, 11.4% in the second quarter of the last fiscal year and 5.4%in the third quarter of the last fiscal year before dropping in the fourth quarter of the last fiscal year.

An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 89.1% in the second quarter of the last fiscal year, by 31% in the third quarter of the last fiscal year and again in the fourth quarter of the last fiscal year.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 7.64 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 8.16 in the third quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 6.1% to $2.11 billion while assets decreased 0.6% to $16.11 billion.

Wall St. Revenue Expectations: Analysts predict a rise of 0.5% in revenue from the year-earlier quarter to $22 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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