UPDATE 3-ADM tops Wall Street view, shares up 4 pct

* Shares up nearly 4 pct on earnings beat, 2010 optimism

* Q2 EPS 88 cents; Street view 72 cents

* Net sales $15.91 billion, down 5 pct

* Oilseed, corn processing profits jump; ag services fall

(Recasts, adds quotes, updates stock price, adds byline)

By Karl Plume

CHICAGO, Feb 2 (BestGrowthStock) – Archer Daniels Midland Co’s
(ADM.N: ) quarterly earnings topped Wall Street expectations and
the grain processor and ethanol producer said demand for food
and fuel was improving, sending shares up 4 percent.

ADM and others in the agricultural sector were hit hard
over the past year as the worst recession in decades hurt
global demand for food and fuel. But signs of a global economic
recovery and the company’s ethanol expansion plans point to a
brighter outlook ahead.

“We’re seeing demand improving in some of our the key
markets we serve and we’re also seeing the U.S. ethanol market
reasonably balanced,” said ADM CEO Patricia Woertz. “We have an
optimistic view of the ethanol business or we wouldn’t be
building the capacity.”

Earnings for the fiscal second quarter that ended Dec. 31
totaled 88 cents per share, handily beating the consensus
analyst forecast for 72 cents, according to Thomson Reuters
I/B/E/S.

“There was a degree of skepticism going in that they would
just merely meet that consensus. And they were very bullish on
ethanol looking out,” said Christina McGlone, analyst with
Deutsche Bank Securities.

ADM, currently the second largest producer of ethanol in
the United States, is ramping up production at a newly-build
ethanol plant in Columbus, Nebraska, and will start production
at another new plant in Cedar Rapids, Iowa, this summer
slightly ahead of schedule.

Both new plants were slated to be 275-million-gallon a year
facilities, but ADM said they would ultimately produce 300
million gallons annually.

“Even though that’s only 50 million gallons, it still shows
that they are very positive about the market,” Deutsche Bank’s
McGlone said.

PROFIT SLIPS

ADM reported a net second quarter profit (Read more your timing to make a profit.) of $567 million,
or 88 cents per share, compared with $578 million, or 90 cents
a share, a year earlier.

Net sales fell 5 percent to $15.91 billion as increased
sales volumes were offset by lower selling prices. Analysts had
expected $16.54 billion.

Oilseed processing results rose by 10 percent to $352
million amid improved margins, strong demand in Asia, and the
absence of fertilizer inventory writedowns that weighed on
year-earlier results.

Corn processing net profit grew ten-fold from the prior
year to $290 million on improved margins in sweeteners and
starches and bioproducts, which includes ethanol production.

Bioproducts emerged from four consecutive quarters of red
ink as lower corn input costs and favorable gasoline blending
economics bolstered ethanol margins.

Agricultural services segment earnings fell to $150 million
from $462 million. Other operating profit, which includes ADM’s
wheat and cocoa operations, increased to $178 million from $5
million.

Results included a $54 million charge due to last-in,
first-out accounting.

Shares of ADM, based in Decatur, Illinois, were up $1.15,
or 3.8 percent, at $31.31 in afternoon trading on the New York
Stock Exchange.

Investing Analysis

(Reporting by Karl Plume; Editing by John Wallace and Derek
Caney)

UPDATE 3-ADM tops Wall Street view, shares up 4 pct