Revenue dropped 15% as the strong dollar limited U.S. grain exports, and corn processing profit fell on weak ethanol margins and lower biofuel production volumes. Revenue dropped to $17.51 billion from $20.70 billion a year earlier. Excluding one-time items, earnings increased to 80¢ per share from 64¢ a year ago.
“In the first quarter, the ADM team demonstrated their ability to leverage the strengths of our diversified business model,” said ADM Chief Executive Officer Juan Luciano. “The Oilseeds team capitalized on favorable market conditions and delivered outstanding results, with strong performances in each region. In Ag Services, our recently created global trade desk (GTD) platform drove higher merchandised volumes. Our new WILD Flavors and Specialty Ingredients business got off to a great start toward achieving the cost and revenue synergies we identified last year. Together, these performances helped deliver a good quarter overall, even as lower industry ethanol margins limited earnings in Corn, and the strong dollar limited U.S. grain exports.”
Oilseeds operating profit of $483 million increased $153 million from strong year-ago results. Crushing and origination operating profit increased $173 million to $334 million. Soybean crushing results for the quarter were the strongest ever, with record volumes in Europe and North America and strong margins globally, driven by strong U.S. and global meal demand. Improved farmer selling helped support a significant improvement in South American origination results.
Refining, packaging, biodiesel and other generated a profit of $52 million for the quarter, down $33 million. Improved biodiesel results in South America — from the enactment of increased blending standards in Brazil — were offset by lower margins in North America and weaker demand in Europe. Oilseeds results in Asia for the quarter improved from the year-ago period, primarily driven by stronger Wilmar results.
Agricultural Services operating profit was $194 million, up $52 million from the year-ago period. Merchandising and handling earnings improved $38 million to $107 million. ADM's new global trade desk (GTD) merchandising platform saw increased volumes and margins. In North America, volumes and margins improved, despite a very active fourth quarter, the start of the South American harvest and the impact of a strong dollar on U.S. export competitiveness.
Transportation results were essentially flat, with increased demand for northbound U.S. barge freight mostly offsetting decreased southbound demand due to lower exports from the Gulf.
Milling and other results improved $15 million to $55 million, due primarily to strong margins for flour, grain and feed.
Corn Processing operating profit decreased from $251 million to $127 million. Sweeteners and starches results declined $10 million to $85 million with increased North American volumes offset by lower contributions from coproducts, reduced equity earnings from joint-ventures, and startup costs related to the Tianjin sweetener facility.
Bioproducts results declined from $156 million to $42 million due to lower ethanol production volumes amid weaker industry margins. Supply/demand imbalances challenged industry ethanol margins most of the quarter, though conditions and margins have been improving since late March.
During the fourth quarter of 2014, ADM closed on the acquisitions of WILD Flavors GmbH and Specialty Commodities, Inc. Starting with the first quarter of 2015, ADM has created a new business segment — Wild Flavors and Specialty Ingredients — which includes the results of these two businesses as well as ADM’s legacy specialty ingredients businesses.
In the first quarter, WILD Flavors and Specialty Ingredients operating profit was $68 million. Globally, the WILD Flavors business is off to a great start towards achieving the cost and revenue synergies that were identified last year. There have been more than 200 joint customer engagements, more than 400 projects in the pipeline and 30 revenue synergy wins across the business units and geographies.