CHICAGO - Archer Daniels Midland Company (NYSE: NYSE:ADM), a global leader in nutrition and agricultural processing, reported second-quarter financial results that fell short of Wall Street expectations.
The company announced an adjusted EPS of $1.03, which was $0.21 below the analyst estimate of $1.24. Revenue for the quarter also missed the mark, coming in at $22.25 billion against the consensus estimate of $23.15 billion.
The company's stock experienced a downturn of 1.8% following the announcement.
ADM's second-quarter performance was notably weaker compared to the same quarter last year, with earnings before taxes down by 47% and adjusted segment operating profit declining by 37%. The adjusted EPS saw a significant drop of 46% from the second quarter of 2023.
Chair of the Board and CEO Juan Luciano commented on the results, noting the challenging market conditions that ADM faced during the quarter. Despite these challenges, Luciano highlighted the company's progress on strategic initiatives for 2024. He also mentioned the sequential improvement in the Nutrition segment and the expectation of margin opportunities improving throughout the year.
Looking ahead, ADM reaffirmed its full-year EPS guidance range of $5.25 to $6.25, which is in line with the analyst consensus of $5.49. This guidance suggests a potential for recovery in the latter half of the year, as the company anticipates improvements in both crush and ethanol, along with the benefits from its focus on operational excellence and strategic priorities.
The second quarter's results were impacted by lower pricing and execution margins, as well as higher corporate unallocated costs. Volume improvements and share repurchases provided some benefits, but were not enough to offset the declines in other areas.
ADM's Ag Services & Oilseeds segment suffered from lower margins due to shifts in farmer selling behaviors and larger South American crops. The Carbohydrate Solutions segment, however, saw a 12% increase in operating profit, thanks to favorable margins in Starches & Sweeteners and ethanol. The Nutrition segment's operating profit declined by 36%, with unplanned downtime and a normalizing texturants market affecting the results.
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