A new week of earnings news is upon us, Fools, and it's time to go shopping -- or at least window-shopping. Tomorrow we'll visit "Supermarket to the World" Archer-Daniels-Midland (NYSE:ADM), as it releases its earnings numbers for fiscal Q2 2006.

Wall Street Wisdom:

  • General consensus. Eight analysts track the fortunes of ADM, splitting their ratings right down the middle: four "buys" and four "sells."
  • Revenues. Analysts expect to see ADM increase sales just 1.2% tomorrow, to $9.17 billion.
  • Earnings. Similarly, analysts are looking for essentially flat results, with profits per diluted share of $0.42.

Margin watch:
When reviewing ADM's rolling margins performance, it's important to remember that in the June 2004 quarter, the company took a massive one-time charge to settle litigation. The effects of that charge were still being felt on the rolling tally through March 2005. This helps to explain why ADM's net margin has been rising ever since, in spite of much weaker improvement in the gross and operating margins.

Margins %

6/04

9/04

12/04

3/05

6/05

9/05

Gross

6.1

6.5

6.7

6.7

6.9

6.7

Op.

3.8

4.2

4.5

4.4

4.5

4.2

Net

1.4

1.6

1.9

2.1

2.9

2.7

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Foolish lookout:
ADM's results last quarter epitomized the word "mixed." Profits from processing corn into syrups and starches skyrocketed 68% as the price of corn dropped (in comparison to last year). However, agricultural services profits dropped by a similar 61%, with the company blaming everything from hurricanes to the global grain market for the disappointment. Other units succeeded and failed to various degrees between those two extremes. With the hurricanes out of the way (till 2006 hurricane season), look for the agricultural services division, at least, to post better comparative results tomorrow.

Competitors:
Bunge (NYSE:BG), Corn Products (NYSE:CPO), and ConAgra (NYSE:CAG) all tend the same field as ADM.

Fool contributor Rich Smith does not own shares of any company named above.