CHICAGO – Archer Daniels Midland Company (NYSE: NYSE:) today announced its financial results for the first quarter ended March 31, 2024. The agribusiness giant reported an adjusted EPS of $1.46, surpassing analyst expectations by $0.08. However, revenue fell short of estimates, coming in at $21.85 billion against a consensus of $22.21 billion.
ADM shares were trading up 0.8% in Tuesday’s premarket session.
The company’s first-quarter performance reflects a 24% decrease in adjusted segment operating profit compared to the same period last year, with significant declines in Ag Services & Oilseeds and Nutrition segments, down 29% and 39% respectively. Despite these challenges, ADM’s CEO Juan Luciano highlighted strategic initiatives such as the ramp-up of Green Bison JV and regenerative agriculture efforts, which are expected to drive future growth.
ADM’s FY2024 EPS guidance ranges from $5.25 to $6.25, with the midpoint of $5.75 slightly above the analyst consensus of $5.57, indicating management’s confidence in the company’s direction despite the current headwinds.
The company’s GAAP earnings per share were $1.42, a 33% decrease from the first quarter of the previous year. This decline was primarily due to lower crush and origination margins, as well as lower mark-to-market timing impacts. However, the company did see some positive developments, such as improved input and manufacturing costs, primarily related to lower energy costs, and higher processed volumes in Ag Services & Oilseeds (AS&O).
In the Ag Services and Oilseeds segment, slower farmer selling negatively impacted export volumes and margins in South America. The Carbohydrate Solutions segment saw an 11% decrease in operating profit, with strong starches and sweeteners margins being offset by lower domestic ethanol margins and moderating margins in the EMEA region. The Nutrition segment’s operating profit was down 39%, with Human Nutrition subsegment operating profit significantly lower due to unplanned downtime and a normalizing texturants market.
Luciano commented on the results, stating, “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.” He also emphasized the company’s productivity initiatives and capital deployment actions, such as the accelerated share repurchase program, which continue to contribute to enhanced shareholder returns.
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