Agriculture processing company Archer Daniels Midland's (NYSE:ADM) stock was discounted 16.8% Friday on extremely poor operating results. While the stock is up 3% today in early trading, it is no bargain.

Look at the stock's trading range over the past decade. The majority of the time, it has traded between $10 and $15 a share, and only during the past six months has the stock ventured up to $25. So at its current price of $18.55, the stock is back to trading where it was a year ago but still above its longer-term trading range.

Strike 1: The stock appears to be headed back to its historic range, at least in my opinion.

The latest quarter's earnings, in a word, stink. While the company's press release trumpets that net earnings increased 19%, subtract out the one-time gain from the sale of Splenda manufacturer Tate & Lyle's (NQB: TATYY) stock, and you'll discover a 14.3% decrease in core earnings.

What shouldn't have been a surprise was the 8.9% drop in net revenue and the 24.9% plunge in operating earnings. In late February, the company was warning that corn syrup prices were not going to rise this year and that there was overcapacity in the ethanol business. Guess what? The Corn Processing operation (which includes ethanol) saw a 23.3% decline in earnings compared with the comparable quarter last year.

More surprising was the 48.3% plunge in Oilseed Processing profits. Strength in Europe was swamped by problems in North America and Asia.

Strike 2: Profits are down in the corn and oilseed operating areas that represented 63.4% of operating profits in the latest quarter.

Analysts expect the company to earn $1.54 in fiscal 2005 (which ends in June) and $1.57 a share the following year -- a hardly heady 2.0% rise.

Fans of the stock will be fast to point out that, at 11.7 times 2006 estimated earnings, it sells for a multiple far below the 19.9 times average afforded the food processing industry. But the industry numbers include a resurgentKellogg (NYSE:K) and a confident Kraft (NYSE:KFT), which is looking for a double-digit percentage gain in 2005 earnings -- a set of companies not offering the fairest standard for comparison.

Before shouting, "Hey, those are value-added food processors," look at the latest quarter for Bunge (NYSE:BG), a company whose core business parallels Archer's. Net sales fell 5%, and earnings were flat net of one-time gains -- and this stock sells for 12.9 times forward earnings.

Strike 3: The earnings outlook for Archer is unexciting, and the stock is, therefore, valued below industry averages. After all, the company is in the commodities business and cannot be expected to produce consistent revenue or earnings growth.

The story for Archer is similar to that at General Motors (NYSE:GM). Bulls look at the $56 and change in revenue per share and think of what would happen if operating margins were only slightly higher. The earnings impact would be explosive. But those are what I'd refer to as dreams.

The stock carries three strikes against it today. This observer will wait to see whether the stock trades back to its historic price range before considering an investment.

Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Click here to see The Motley Fool's disclosure policy.