Archer Daniels Midland Co. reported a quarterly profit that beat Wall Street forecasts by a wide margin, helped by higher selling prices for foods like corn syrup and hedging gains on raw material costs.
Shares of ADM, one of the largest U. S. food processors and ethanol producers, shot up as much as 22 per cent after the company revived investor hopes that it can make money and increase cash flow despite a slowing world economy and tighter credit conditions.
ADM shares had plunged 57 per cent since April.
Expectations for ADM were also dimmed after rival Bunge Ltd., the world’s largest oilseed processor, posted quarterly earnings last month that missed Wall Street’s expectations by about 50 per cent, due mostly to foreign currency exchange rates.
By contrast, ADM, which does not have the same international exposure, increased profit and cash flow.
ADM also said Nov. 4 that it is forming a $500 million joint venture with Brazil’s Grupo Cabrera to make ethanol from sugar cane. The company is also interested in distressed assets of U. S. ethanol distillers squeezed by oil refiners and gyrating corn costs. ADM is the world’s largest producer of high-fructose corn syrup.