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Archer Daniels Midland Company ADM is slated to report first-quarter 2025 results on May 6, before market open. The company is likely to report bottom and top-line declines when it posts the quarterly results.
The Zacks Consensus Estimate for the company’s earnings is pegged at 69 cents per share, which indicates a plunge of 52.7% from the year-ago quarter’s figure. The consensus mark has fallen 2.8% in the past 30 days. For revenues, the consensus mark is pegged at $20.7 billion, implying a 5.3% dip from the year-ago quarter’s figure.
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In the last reported quarter, the company delivered an earnings surprise of 6.5%. Its earnings missed the Zacks Consensus Estimate by 3.8%, on average, in the trailing four quarters.
Key Factors to Influence ADM’s Upcoming Results
Archer Daniels is grappling with tough market conditions. One of the key factors contributing to its underperformance is the sluggishness in its Ag Services & Oilseeds segment. The company has been grappling with numerous headwinds in the agriculture cycle, with few market dislocations and increased cost inflation. Also, depressed vegetable oil demand and low prices owing to higher market supply and uncertainty are likely to have hurt the Crushing subsegment.
In Refined Products and Other, margins have been pressurized by the increased supply of low-carbon intensity feedstock. Weak demand from food customers in North America has also been negatively affecting refining margins on a year-over-year basis. Several market and geopolitical challenges, with ongoing price weakness of main feed ration commodities, are acting as deterrents. The feed additives market has been adversely affected by volatility in vitamins due to supply disruptions.
All such aforesaid factors, along with potential risks and uncertainties, and other operational challenges, are likely to affect ADM’s results in the to-be-reported quarter. In Carbohydrate Solutions, for the first quarter, ADM had anticipated segment operating profit to below by nearly 5-15% compared with the prior-year period.
For the Ag Services & Oilseeds segment, management had expected segment operating profits to be down approximately 50% in the first quarter of 2025, due to decreases in crushing and RPO. For crushing, it anticipates soybean and canola execution crush margins to be lower year over year. The Zacks Consensus Estimate for the Ag Services & Oilseeds segment is pegged at $16.1 billion for revenues and $454 million for the adjusted segment operating profit. These estimates reflect a year-over-year decline of 6.4% and 47.5%, respectively.
However, ADM has been focused on optimizing the organizational and operational structure across Human and Animal Nutrition. The Zacks Consensus Estimate for the Nutrition segment’s revenues is pegged at $1.9 billion, up 0.5% year over year. Management had anticipated Nutrition’s operating profit to be nearly flat sequentially in the first quarter. The company has also been actively managing productivity and innovation as well as aligning work to the interconnected trends in food security, health and wellbeing.