Archer Daniels Midland Co. (ADM) is rebounding steadily after the commodities bubble burst last year. Estimates moving forward are showing steady growth.

Company Description

Archer Daniels is a global agriculture company, processing crops into food ingredients, agricultural feed, renewable fuels, and other alternative chemicals.

EPS Surprise

In the company’s latest earnings report, on Nov 3, Archer Daniels posted earnings per share of 77 cents, besting the Zacks Consensus Estimate by 21 cents. This is down sharply form last year’s $1.62.

Sales where also down, to just under $15 billion, a 29% decrease. Volumes remained steady, but underlying commodity prices lead to lower selling prices. Foreign exchange translation also hit the sales figure.

While these results seem less than impressive, the sequential growth is strong and the CEO sees improving demand moving forward.

Revisions Coming In

The full-year consensus for fiscal 2010 is now $2.72, up from $2.38 following the release as estimates continue to trickle in. Next year’s Forecasts are averaging $2.88, up from $2.67.

These levels project modes growth of 3% this year and another 6% next year.

Income and Value

Archer Daniel is maintaining a dividend payment of 14 cents per quarter, roughly a 1.8% yield. Shares of ADM continue to trade at a great value as well, just 11.5 times forward earnings.

The Chart

In the chart below, you can see the EPS come crashing down after the commodities bubble burst. However, looking forward, the red line, you can see the steady increase expected into the future.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

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