UPDATE 2-ADM earnings drop as pain lingers from U.S. drought

Wed May 1, 2013 5:07pm EDT

* Quarterly earnings miss Wall Street expectations

* ADM managing through tight grain, soy supplies -CEO

* Bunge, Cargill also noted lingering impact from drought

By Tom Polansek

CHICAGO, May 1 (Reuters) - Archer Daniels Midland Co on Wednesday reported lower-than-expected quarterly earnings, the latest of the world's top grain traders to cite lingering pain from a historic U.S. drought.

The worst drought in more than half a century last year devastated the corn harvest in the United States, the world's top grain producer, and sent grain prices to record highs.

Global grain and soybean supplies remain tight, with buyers hoping U.S. farmers bring in a large autumn harvest to replenish inventories.

"We continue to manage through tight U.S. stocks of oilseeds and grains until the North American harvest," Chief Executive Patricia Woertz said in a statement.

ADM is one of four large players known as the "ABCD" companies that dominate the flow of agricultural goods around the world. The others are Bunge Ltd, Cargill Inc and Louis Dreyfus Corp.

ADM reported net earnings of $269 million, or 41 cents a share, for the first quarter ended March 31. That was down from $399 million, or 60 cents a share, for the same quarter a year before.

Adjusted earnings per share were 48 cents, down from 78 cents a year ago. Analysts surveyed by Thomson Reuters expected earnings of 51 cents.

Revenue totaled $21.72 billion, beating Wall Street's expectations of $21.33 billion.

Rival Bunge last week reported earnings of $170 million for the first quarter ended March 31, up from $84 million a year earlier, but warned that crop supplies remained tight. Results in Bunge's agribusiness sector were down from a year earlier.

Cargill last month said month lingering pressure from the drought hurt its meat and grain operations, knocking down earnings for the fiscal third quarter ended Feb. 28 by 42 percent.

TAKEOVER DOWN UNDER

The global grains sector has seen a wave amid intense competition in recent years as companies scramble to feed fast-developing countries like China.

GrainCorp Ltd. last week agreed to back a sweetened A$3.0 billion ($3.1 billion) takeover bid from ADM, ceding control of Australia's largest independent grains handler after a six-month courtship.

If successful, the takeover bid, which need regulatory approval, would boost ADM's international presence and give it an important foothold in Asian markets.

ADM executives are expected to discuss the deal on a call with analysts at 5 p.m. CDT (2200 GMT).

ADM shares are up almost 23 percent so far this year, compared to a 2 percent decline in Bunge shares.

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