* Q3 EPS of 86 cents matches analyst estimates
* Profit up on strong corn and oilseed processing results
* Agribusiness hurt by volatile prices, instability, Japan
* Shares fall 4.9 percent (Adds analyst quote, updates share price)
By Karl Plume
CHICAGO, May 3 Archer Daniels Midland Co (ADM.N) posted a slight gain in its agricultural services business, held back by volatile commodities prices, instability in the Middle East and Africa, and delayed shipments in Japan.
ADM's disappointing performance in agricultural services, the company's largest segment in terms of revenue, was in contrast to results reported last week by rival agribusiness Bunge Ltd (BG.N) and ADM's shares fell 4.9 percent. [ID:nN28188160]
ADM also warned on Tuesday about the impact of elevated energy prices and global instability going forward.
Anti-government protests in North Africa and the Middle East disrupted grain shipments to the key commodities importing region, hurting the agricultural processor's bottom line in its fiscal third quarter that ended March 31.
That was followed by delays in shipments to Japan, the world's top corn importer and a major soybean and wheat importer, following the March 11 earthquake and tsunami.
"When you cannot offload ships and you have them sitting out to sea determining when you can offload them, when it comes to valuations, it can make a difference," John Rice, ADM's vice chairman, said on a call with analysts.
The company's overall earnings rose on strong results in its corn and oilseed processing segments.
For its fiscal third quarter, ADM reported net earnings of $578 million, or 86 cents per share, matching the average analyst estimate, according to Thomson Reuters I/B/E/S.
In the same quarter a year ago, ADM earned a net $421 million, or 65 cents per share.
Quarterly revenue rose to $20.1 billion, topping analyst expectations for $17.7 billion.
"Bunge said they were able to do a lot of commodity trading, exporting, and that had been very supportive to their earnings. ADM did not really realize that bump on trading," said Min Tang-Varner, analyst with Morningstar Inc.
The Decatur, Illinois-based company is one of the largest processors of corn and soybeans in the world and among the top ethanol producers in the United States.
ADM said on Tuesday that crop shortages in some areas of the world led to highly volatile grain and oilseed prices and demand for crops and agricultural goods continues to rise.
Oilseeds processing profit jumped 26 percent to $512 million, helped by strong results in its North American elevators and processing plants and its refining, packaging and biodiesel operations in the Americas, ADM said.
Profit in ADM's corn processing segment, which includes its ethanol and sweeteners businesses, nearly doubled to $204 million.
Corn processing volume rose 13 percent, helped by accelerating production at two recently build ethanol plants and strong demand for corn-based sweeteners and feed ingredients.
Profit at the company's agricultural services division rose by $6 million to $171 million, tempered by volatile commodities markets, regional instability in the Middle East and Africa, and logistical problems in Japan, a top importer.
The company's other business units, including wheat milling and cocoa operations, generated a net profit of $119 million, up from $22 million a year earlier.
ADM shares were down 4.9 percent to $35.18 in early afternoon trading on the New York Stock Exchange. (Reporting by Karl Plume; Editing by Derek Caney and Tim Dobbyn)