Key Takeaways
- Quarterly Financial Performance: ADM recorded a segment operating profit of $1,311 million and an adjusted segment operating profit of $1,317 million for the first quarter of 2024.
- Earnings Overview: GAAP earnings per share were $1.42, with adjusted earnings per share at $1.46, reflecting a year-over-year decline in both metrics.
- Segment-Specific Results: Notable decreases in profits were observed in the Ag Services & Oilseeds and Nutrition segments, while the Carbohydrate Solutions segment saw a smaller decline.
- Operational Highlights: ADM emphasized its strategic initiatives like the Green Bison JV, regenerative agriculture, and BioSolutions to navigate challenging market conditions.
- Future Outlook: Despite current challenges, ADM remains confident in meeting its full-year earnings guidance.
Financial Performance Details
ADM (NYSE: ADM), a global leader in food processing and commodities trading, announced its financial results for the quarter ending March 31, 2024. The company reported a segment operating profit of $1,311 million with an adjusted segment operating profit slightly higher at $1,317 million. These figures represent a 24% decline compared to the previous year, underscoring the challenging market conditions faced by the company.
Earnings Analysis
The reported earnings per share (EPS) on a GAAP basis stood at $1.42, while the adjusted EPS was $1.46. Both metrics saw significant declines from the previous year, with a 33% decrease in reported EPS and a 30% decrease in adjusted EPS. This downturn is attributed to lower pricing and execution margins, particularly in the crush and origination segments, as well as unfavorable mark-to-market timing impacts.
Segment Performance
- Ag Services & Oilseeds (AS&O): This segment experienced a 29% drop in operating profit, driven by decreased global trade and risk management results, alongside slower farmer selling impacting export volumes and margins in South America.
- Carbohydrate Solutions: Operating profit decreased by 11%, as improved demand for sustainably certified ethanol exports partially offset declines in starches, sweeteners, and domestic ethanol margins.
- Nutrition: The segment saw a 39% reduction in operating profit, significantly impacted by unplanned downtime and a normalizing market for texturants.
Strategic Initiatives and Corporate Outlook
Juan Luciano, Chair of the Board and CEO of ADM, commented on the company’s resilience and strategic direction: “ADM’s solid first quarter results showcased our team’s ability to execute our strategy with agility in the face of anticipated challenging market conditions. To manage through the cycle, we are driving key strategic initiatives across the business, including the ramp-up of production at our Green Bison JV and the scaling of our regenerative agriculture and BioSolutions efforts.”
Despite the current market challenges, ADM is optimistic about its future, reinforcing its commitment to strategic initiatives aimed at reducing supply chain complexity and enhancing customer service. The company also continues to focus on shareholder returns through programs like the accelerated share repurchase.
ADM’s Strategic Expansion in Regenerative Agriculture
ADM is expanding its global regenerative agriculture program to cover over 2.8 million acres by 2023, surpassing its initial 2 million acre target. The company has plans to target 3.5 million acres for 2024 and increase its 2025 goal from 4 million to 5 million acres. ADM collaborates with major downstream customers and other partners to synchronize the supply chain with the growing consumer demand for sustainable practices. Regenerative agriculture emphasizes the protection and enhancement of soil health, biodiversity, climate, and water resources while also fostering the economic sustainability of farms. ADM published its first-ever detailed regenerative agriculture report in November, showcasing its priorities, goals, and the progress of its initiatives.
Future Guidance
Looking ahead, ADM reaffirms its earnings guidance for the full year, projecting adjusted earnings per share in the range of $5.25 to $6.25. This forecast underscores the company’s confidence in its strategic plans and operational adjustments designed to navigate ongoing market fluctuations and position itself for sustainable growth.
Read more here.
ADM’s Latest News
ADM Animal Nutrition Announces Recall of Animal Feed Products (2024/04/02)
ADM Animal Nutrition has issued a recall for several animal feed products due to elevated levels of certain ingredients that could potentially cause health issues in animals. The recall encompasses various states and specific lot numbers of brands such as Pen Pals® Chicken Starter-Grower, MoorMan’s ShowTec, AMPT-A, Seniorglo, and MotivAte. The cause of the recall was an equipment malfunction at their Quincy, Illinois plant, which led to the inadvertent mixing of ingredients at levels higher than their strict quality standards allow. ADM has advised customers to cease using the affected products immediately and consult specific lot numbers for identification. The company has also committed to rectifying the issue and taking steps to prevent such occurrences in the future.
DOJ Investigates Accounting Practices (2024/02/06)
The U.S. Justice Department is investigating accounting practices at Archer-Daniels-Midland Co. The company suspended its CFO due to an internal investigation into accounting practices within its Nutrition division. The investigation includes interviews with former ADM employees about the company’s pricing practices between its commodities units and Nutrition division. No official statements have been made by the company, DOJ or the US Attorney’s Office for the Southern District of New York.
Class Action Lawsuit Filed Against Archer-Daniels-Midland for Alleged Securities Fraud (2024/01/25)
A class action lawsuit has been filed against Archer-Daniels-Midland Company (ADM) and some of its executives for securities fraud. The lawsuit alleges that ADM made false and misleading statements about its Nutrition segment’s performance and accounting practices between April 30, 2020, and January 22, 2024. It is claimed that ADM’s growth in the Nutrition segment was overstated and marred by improper accounting practices. ADM’s CFO, Vikram Luther, has been placed on leave amid an investigation into the company’s accounting practices. The lawsuit represents a significant legal challenge for ADM, raising questions about the integrity of its financial reporting and corporate governance practices.
Appoints New CFO Amidst Investigations Into Security Fraud (2024/01/23)
Archer-Daniels-Midland (ADM) has appointed Ismael Roig as Interim CFO, succeeding Vikram Luthar, who is on administrative leave due to an ongoing investigation into certain accounting practices in ADM’s Nutrition segment. The investigation was initiated by the US Securities and Exchange Commission (SEC), and ADM is cooperating with them. The Portnoy Law Firm is also investigating possible securities fraud and may file a class action on behalf of investors. ADM has delayed its earnings release and annual report due to the ongoing inquiry. Ismael Roig has a rich background in ADM and is expected to lead the Finance organization during this period. ADM anticipates delivering above $6.90 in adjusted earnings per share for the fiscal year ended December 31, 2023, subject to the completion of annual close processes and internal controls.
ADM’s First Fully Traceable Soybean Shipments (2024/01/17)
Inaugural Regenerative Agriculture Report (2023/11/20)
Archer-Daniels-Midland (ADM) has released its first annual Regenerative Agriculture Report, outlining its achievements and goals in sustainable farming practices. The report highlights the significant expansion of ADM’s regenerative agriculture program, which now covers nearly 2 million acres globally, with a goal of reaching 4 million acres by 2025. ADM’s innovative approach to regenerative agriculture is based on Indigenous land management principles and includes minimizing soil disturbance, maintaining living roots in the soil, and maximizing biodiversity. The company has also formed strategic partnerships with industry giants such as PepsiCo, Nestlé, and Carlsberg to enhance its impact on sustainability. ADM is poised to further its commitment to sustainable agriculture by expanding its initiatives in Brazil and participating in the upcoming COP28 event.
ADM’s Regenerative Agriculture Program in Brazil (2023/11/22)
ADM has launched a regenerative agriculture program in Brazil to promote sustainable agricultural practices focused on soil health, biodiversity, and farm productivity. It begins with a pilot involving 20 soy farmers over nearly 50,000 acres, providing technical assistance and training to measure soil organic matter and carbon sequestration. The initiative aims to create an economically viable model for regeneration, decarbonization, and greenhouse gas removal. ADM’s efforts underscore its commitment to sustainability, plant-based solutions, and decarbonizing the industry.
ADM and Marathon Petroleum Launch Green Bison Soy Processing in North Dakota (2023/11/15)
Archer-Daniels-Midland (ADM) and Marathon Petroleum Corp. celebrated the opening of their joint venture, Green Bison Soy Processing, in Spiritwood, North Dakota. This state-of-the-art facility will process local soybeans to produce 75 million gallons of renewable green diesel per year, contributing to the growing demand for renewable fuels. The complex has already had a substantial economic impact in the region, employing about 75 people and supporting hundreds of jobs during its construction.
Report on Regenerative Agriculture (2023/11/09)
ADM has released a report on regenerative agriculture program adoption. The report highlights the growing importance of regenerative agriculture in consumer choices and corporate strategy. Consumers are increasingly choosing sustainable products, with 73% trusting retailers and brands more if they implement regenerative agriculture programs. Industry revenue is expected to soar from $8.70 billion to $32.29 billion within a decade. Late adopters are feeling the pressure. ADM is collaborating with diverse stakeholders to effect positive change on a global scale. They are advocating for change and providing the tools and partnerships necessary to achieve it.
Solugen and ADM Unite for Plant-Based Innovations (2023/10/31)
Solugen and ADM have partnered to bring a new era of plant-based specialty chemicals. The new manufacturing facility in Marshall, Minnesota will produce low-carbon organic acids and sustainable biomaterials as alternatives to fossil fuel-based materials for diverse applications. Solugen’s Bioforge platform is at the core of their revolutionary approach. The facility’s construction will commence offsite this year, with on-site operations in early 2024. Once operational in the first half of 2025, it’s anticipated to add at least 40 permanent positions to the workforce.
ADM Third Quarter 2023 Financial Results (2023/10/25)
ADM’s earnings per share (EPS) decreased in Q3 2023 compared to the same period in 2022, while there was a decline in North American origination for its ag services and oilseeds segment. However, the carbohydrate solutions segment grew significantly, and the nutrition segment faced challenges due to reduced demand for plant-based proteins in meat alternatives. ADM continues to diversify its portfolio with the Spiritwood production facility and the Broadwing Energy project, demonstrating its commitment to sustainable growth and innovation.
Read more here.
ADM’s Monumental Investment in the Half-Earth Project (2023/10/16)
ADM announced a $1 million donation to the E.O. Wilson Biodiversity Foundation during Half-Earth Day to support research and education programs such as the Half-Earth Chairs & Scholars program and the Half-Earth Project Educator Ambassador program. The donation will be funneled through ADM Cares, the corporate social investment wing of ADM. The Chief Sustainability Officer at ADM, Alison Taylor, emphasized the alignment between ADM’s sustainability efforts and the Foundation’s mission. The collaboration between ADM and the E.O. Wilson Biodiversity Foundation sets a promising example of the commitment to environmental conservation and sustainability.
FBN & ADM’s AgTech Path to Sustainability (2023/10/13)
The partnership between Farmers Business Network, Inc. (FBN) and ADM is forging a path toward a more sustainable future in agriculture through technology and innovation. FBN’s Gradable platform streamlines operations and promotes sustainable farming practices, while ADM’s re:generations™ program provides financial and technical support to farmers. This collaboration recognizes farmers’ commitment to conservation practices and emphasizes the positive environmental impacts of sustainable agriculture. The expansion of these programs in 2023 promises to empower even more farmers and drive the industry toward a more sustainable and technologically advanced future.
ADM & Syngenta: Pioneering Sustainable Oilseeds (2023/09/29)
ADM and Syngenta are collaborating to research and introduce oilseeds with lower carbon intensity. The MoU allows both companies to tap into their strengths, with Syngenta bringing R&D capabilities and ADM boasting expansive scale and logistical finesse. The companies aim to cultivate and process futuristic varieties and are optimistic about sealing definitive agreements by year-end.
This new app and website portal will replace GrainBridge, which will be discontinued after Friday, August 25. Over the past year, Bushel has collaborated with ADM to transition key GrainBridge technology features into this new platform, incorporating Bushel’s user-friendly interface.
Bushel and ADM Launch New Digital Platform for Grain Producers (2023/08/03)
ADM is committed to enhancing the digital experience for producers and sees innovation as central to its growth strategy. Joining the Bushel network is a vital step in their digital evolution. Bushel serves as a central hub for information and transactions, powering over 2,600 grain facilities and managing nearly 45% of grain origination in the United States and Canada. The integration with ADM will enable producer customers to access private information securely and easily, eliminating manual data entry. CEO of Bushel, Jake Joraanstad, expressed pride in welcoming ADM to the network and highlighted the commitment to providing producers with a top-tier digital experience.
ADM Expands Regenerative Agriculture Program For Sustainable Farming (2023/07/19)
Archer-Daniels-Midland (ADM) is expanding its re:generations regenerative agriculture program to cover more North American producers. In 2022, the program enrolled over a million acres and ADM now plans to expand it to span 2 million acres in 2023. The ultimate goal is to reach 4 million acres worldwide by 2025. The program offers financial incentives and technical support to implement practices such as cover cropping, better nutrient management, and conservation tillage, with premium payments of up to $25 per acre per year for registered producers. ADM will collaborate with independent organizations for state-specific technical assistance and conduct in-person information sessions in July and August to help initiate the enrollment process.
2022 CSR, Showcasing Progress In Key ESG Areas (2023/05/19)
ADM, a global leader in food, feed, fuel, industrial, and consumer products, has released its 2022 Corporate Sustainability Report, highlighting its commitment to sustainability and progress in critical environmental, social, and governance areas. The report outlines ADM’s achievements and goals in three categories: Feeding the World, Protecting Nature, and Enriching Lives. Regarding Feeding the World, ADM has focused on efficient land use, alternative proteins, reducing food waste, and ensuring food safety. Protecting Nature initiatives include traceability, emissions reduction, water conservation, regenerative agriculture, and biodiversity management. Enriching Lives efforts encompass philanthropy, human rights, safety, and corporate culture. ADM’s sustainability efforts demonstrate its dedication to making a positive impact across its value chains and positioning sustainability as a critical component of its growth strategy.
Air Protein Announce Strategic Development Agreement (2023/05/19)
Archer-Daniels-Midland (ADM) and Air Protein have entered into a Strategic Development Agreement (SDA) to advance research and development efforts in creating innovative proteins for nutrition. The collaboration combines ADM’s nutrition, formulation, and research expertise with Air Protein’s landless agriculture platform. The goal is to develop cost-effective ingredients that meet meat substitutes’ nutrition, flavor, and texture targets. The SDA also includes exclusive rights for ADM and Air Protein to collaborate on building and operating the world’s first commercial-scale plant. ADM has been a strategic investor in Air Protein, providing significant backing for its growth initiatives. Air Protein recently completed a regulatory review confirming the safety of its protein, marking an important milestone in its journey to offer consumers the protein of the future.
Partners With Believer Meats To Develop and Commercialize Cultivated Meat (2023/04/13)
ADM and Believer Meats have partnered to develop and market cultivated meat products. As a global leader in sustainable nutrition, ADM aims to meet food security and sustainability needs by expanding the protein ecosystem, including cultivated meat. Believer Meats brings its ground-breaking cell-cultivation technology to the collaboration. The partnership will leverage ADM’s ingredient expertise and nutrition solutions to enhance Believer’s proprietary meat production process. The non-exclusive agreement also allows for the potential commercialization of new products, supported by ADM’s processing expertise and footprint. With a shared commitment to sustainability and meeting the demands of a growing population, this collaboration is poised to accelerate the growth and commercialization of cultivated meat, shaping a more sustainable food system for the future.
ADM and Brightseed Partner to Develop Synbiotic Products For Microbiome Optimization (2023/04/10)
Archer-Daniels-Midland (ADM), a leader in nutrition around the world, and Brightseed, a bioactive business, have announced a partnership to create functional synbiotic products that are evidence-based and aimed at optimizing the microbiome for proactive and individualized health. To understand the molecular interactions between dietary plants and gut microorganisms and their possible effects on human health, the cooperation uses Brightseed’s artificial intelligence (A.I.) platform, Forager®.
New Production Facility In Valencia, Spain (2023/02/27)
Archer-Daniels-Midland (ADM) has opened a new production facility in Valencia, Spain, to produce probiotics and postbiotics. The $30 million investment will increase ADM’s production capacity fivefold to 50 metric tons per year. The facility supports ADM’s growth strategy in the health and wellness sector, aiming to increase revenue from $500 million in 2022 to $2 billion in the next decade. The facility will produce ADM’s proprietary strains, including BPL1™ probiotic and heat-treated BPL1™ postbiotic, catering to the US, Asia-Pacific, and European markets. ADM expects its customer base to triple in the next five years, aligning with the estimated $10.4 billion growth of the probiotic supplement retail market by 2027.
ADM Q4 Results: Strengthening Focus On Sustainability and Innovation (2023/01/27)
Archer-Daniels-Midland (ADM) achieved strong financial results in Q4 2022, with full-year adjusted EPS of $7.85 and segment operating profit of $6.6B. The company’s strategic initiatives and focus on sustainability, innovation, and delivering value to shareholders position it well for future growth. ADM also returned $2.3B to shareholders through dividends and share repurchases.
Read more here.
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