UPDATE 1-ADM to sell its chocolate business in the third quarter
(Adds details from earnings report, company comment, market background)
NEW YORK/CHICAGO Aug 5 (Reuters) - Agribusiness company Archer Daniels Midland Co expects to sell its global chocolate business by the end of the third quarter, its president said on Tuesday, after opting to hold onto its larger cocoa press business.
"We expect to have signed agreement by the end of the third quarter to sell our global chocolate business," said ADM President Juan Luciano on a conference call with analysts to discuss the Illinois-based company's second-quarter report.
The company reported higher-than-expected earnings of $533 million, or 81 cents per share, up from $223 million, or 34 cents a share a year earlier, citing strong U.S. exports and demand for ethanol.
ADM is one of the world's top three cocoa dealers. In April, the company said it would keep its cocoa presses, which make up about two-thirds of its cocoa business, but still sell its chocolate business after long-running negotiations to sell both operations to a buyer collapsed.
ADM has about six chocolate facilities, the company previously stated.
ADM's processing of cocoa and other unspecified commodities made its second-straight quarterly profit at $20 million, up from a loss of $17 million in the year-ago period.
"In cocoa, the margin environment remained good," Luciano said.
The company took a $1 million charge related to its cocoa hedges, its second straight quarterly hedging loss, versus a gain of $11 million in the second quarter of 2013. This comes as cocoa futures prices soared to three-year highs around $3,150 per tonne.
Strong demand for cocoa butter, a main byproduct of the bean that gives chocolate its melt-in-the-mouth texture, caused its ratio to soar. Meanwhile, demand for cocoa powder, which is used in baked goods, chocolate drinks and ice cream, is weak and caused its price to tumble. (Reporting by Marcy Nicholson in New York and Tom Polansek in Chicago; Editing by Jeffrey Benkoe and Nick Zieminski)
- Citing security threat, Obama expands U.S. role fighting Ebola
- Tesla prevails in top Massachusetts court over direct sales
- Russia needs government investment to avoid recession, says former finance minister
- Boeing, SpaceX win contracts to build 'space taxis' for NASA
- Stocks end higher on bet Fed won't change rate stance