According to Reuters on August 5, Archer Daniels Midland(ADM) reported lower-than-expected quarterly profit Tuesday because of a drop in earnings from agricultural services and wheat and cocoa processing. ADM’s earnings fell 61 percent, to $372 million, or 58 cents a share, in the fourth quarter, which ended June 30, compared with $954.8 million, or $1.47 a share, a year earlier. The miss in earnings, combined with a drop in crude oil prices, sent shares of ADM, one of the largest American food processors and ethanol producers, to their lowest level in more than two years.
ADM’s shares have fallen more than 40 percent this year on concerns that record corn prices would erode ethanol margins and that the federal government would reduce incentives to produce alternative fuels from crops, given rising food prices. A Citi Investment analyst, David Driscoll, wrote in a research note, adding that the report could worsen jitters for investors already worried about agriculture.
As shown by the charts below, ADM's share prices are currently oversold.
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