CHICAGO, ILLINOIS, U.S. — The first quarter of fiscal 2019 “proved more challenging than initially expected” for Archer Daniels Midland Co., the company’s chief executive said when financial results were announced on April 26.

Net earnings attributable to ADM in the first quarter ended March 31 totaled $233 million, equal to 41¢ per share on the common stock, down 41% from $393 million, or 70¢ per share, in the same period a year ago.

Revenues for the first quarter eased 1.5%, falling to $15.304 billion from $15.526 billion.

“It was a more challenging quarter than we initially expected,” Juan Luciano, president and chief executive officer, said during an April 26 conference call with analysts. “Severe weather in North America, the ongoing China trade disputes and a difficult ethanol industry margin environment all impacted the quarter.

“As we look ahead, however, we expect improved conditions in the second half of the year and we remain focused on executing our strategy and making changes to improve our company, including some new actions we are announcing today. And despite the challenging start of the year, we remain committed to continuing to pull the levers under our control to deliver our objective of full-year earnings comparable to or higher than 2018.”

Operating profit in the Origination segment increased 65% in the first quarter of fiscal 2019, climbing to $76 million from $46 million. Merchandising and handling profit rose 42% during the quarter to $61 million, while transportation profit increased sharply to $15 million from $3 million.

“The team executed well and produced solid margins from North American exports of both soybeans and corn,” said Ray G. Young, executive vice-president and chief financial officer. “In addition, a strong performance in the structured trade finance and the reversal of some timing impacts from the fourth quarter help to offset these softer performance in global trade, which was impacted by normalized South American soybean and soybean meal margins versus the first quarter of last year. Results in the quarter were also held back by high water river conditions, which limited grain movement and sales in North America. The transportation team did a great job to deliver higher year-over-year results as improved freight rates in northbound movements offset lower overall margin volumes caused by unfavorable river conditions.”

Oilseeds Processing profit fell 2.3% in the first quarter, to $341 million. Crushing and Origination results increased 252%, to $211 million, but refining, packaging, biodiesel and other fell 58% and Asia declined 51% during the quarter.

Operating profit in the Carbohydrate Solutions segment decreased 55% in the first quarter to $96 million. Starches and sweeteners profit eased 22% during the quarter, and the company’s bioproducts unit sustained a decline of $74 million in the period.

“The severe weather in North America during the quarter significantly affected results in both starches and sweeteners and bioproducts by reducing production volumes, increasing manufacturing logistics costs and causing onetime remediation expenses,” Young said. “The most significant impacts were at our corn wet and dry mills in Columbus, Nebraska, though the Decatur (Illinois) complex was also impacted due to slowdowns in corn deliveries.”

In the Nutrition segment operating profit decreased to $81 million in the first quarter of fiscal 2019, down from $96 million a year ago. Within the segment, WFSI profit improved to $88 million from $73 million.

Looking ahead, Luciano identified three new measures ADM has planned to strengthen the company, enhance results and drive long-term value creation.

First, the company plans to repurpose its corn mill in Marshall, Minnesota, U.S., to produce higher volumes of food and industrial grade starches as well as liquid feedstocks for food and industrial uses. ADM also intends to phase out production of high-fructose corn syrup at the facility as soon as it completes committed deliveries, Luciano said.

“The market for starch continues to grow in North America,” he said. “Our teams have done a great job meeting this demand and with this repurposing, we'll be positioning ourselves to continue to be a leader in food and industrial starch.”

Luciano said ADM also will create an ethanol subsidiary that will report as an independent segment once it is established.

“The establishment of the new subsidiary will facilitate the separation of our three ethanol dry mills as we advance strategic alternatives, which may include, but are not limited to, a potential spin-off of the business to existing ADM shareholders,” he said. “Of course, as with any strategic decision, these changes to our portfolio will be subject to market conditions, acceptable valuations and the approval of our board.”

Finally, ADM will continue to follow through on a series of actions put in place earlier in April to enhance the company’s ability, accelerate growth and strengthen customer service. Among the actions is a series of organizational changes to help centralize and standardize business activities and processes and enhance productivity and effectiveness.