Archer Daniels Midland's Amazing Quarter

Archer Daniels Midland (ADM) reported yesterday and announced record earnings, saying that revenues increased by 50%.

Patricia Woertz, chairman and CEO, said:

ADM's record earnings for the second quarter and first half of fiscal 2008 demonstrate the value created by and the strengths of our broadly diversified asset base and product portfolio...
This quarter, heightened demand, coupled with geographic crop imbalances, drove volumes, prices and
volatility in many key markets. Our team's skill in managing both risk and rapidly changing market opportunities, enabled us to deliver outstanding value for our shareholders.

Second quarter segment operating profit increased 25 % to $ 955 million from $767 million last year.

• Oilseeds Processing operating profit increased on improved margin conditions due to strong protein and oil demand.
• Agricultural Services results increased $ 184 million for the quarter and $ 298 million for the six months, due principally to improved global merchandising and handling results in volatile commodity market conditions.
• Other segment operating profit increased primarily due to improved results of wheat and malt processing operations and increased financial services income.
• For the six months, Sweeteners and Starches operating profit increased $ 40 million due principally to favorable risk management results.
• Bioproducts results declined $ 56 million for the quarter and $ 137 million for the six months due principally to higher net corn costs and lower ethanol selling prices partially offset by increased ethanol sales volumes and favorable risk management results.
• LIFO charges exploded from ($105) to ($270) in the quarter.
• The company repurchased 2% of outstanding shares during the quarter.

Lots of questions in response to yesterday's call. These from Friday and some new ones:

• LIFO, is the increase we saw going to stabilize or hopefully decrease?

• Ethanol pricing, has it stabilized and what does 2008 look like?

• HFCS, with the Mexican market opening fully in 2008, guidance?

• Repurchases, will the current trend continue?

Can't wait to hear the answers...

Disclosure: Long ADM