US oilseed and cocoa processor Archer Daniels Midland (ADM) said on Monday it will post a gain of $93 million in its fiscal third quarter, due to the sale of a 27.9 million share stake in UK starch and sweeteners firm Tate & Lyle, reports Lindsey Partos.
ADM, the third largest global food firm (in terms of food sales), recently sold its interest in Tate & Lyle, the London-based supplier of low-calorie sweetener Splenda, for $271 million.
The gain will boost figures knocked in the second quarter by higher corn and energy costs that saw, for example, earnings at sweetener and starch operations falling $31 million to $45 million.
At the end of February shares in the firm fell by more than 7 per cent after a Wall Street investment bank downgraded the food products maker on news the company will not be able to increase prices for its sweetener high-fructose corn syrup (HFCS) this year.
Analysts report that the firm had enjoyed an impressive 43 percent rise in its stock price over the past year. But the lack of HFCS pricing power suggested to some analysts that those gains may be coming to an end.
ADM told analysts in February that it was concerned about not being able to raise prices on high fructose corn syrup, a key ingredient in the US for making beverages although far less common in Europe.