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Archer Daniels (ADM) Q1 Earnings Beat Estimates, Revenues Down
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Archer Daniels Midland Company (ADM - Free Report) posted first-quarter 2024 results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. Both metrics declined year over year.
Adjusted earnings of $1.46 per share in the first quarter outpaced the Zacks Consensus Estimate of $1.35. However, the figure declined 30% from earnings of $2.09 per share in the year-ago quarter. On a reported basis, Archer Daniels’ earnings were $1.42 per share, down 33% from the year-ago quarter’s $2.12.
Revenues fell 9.5% year over year to $21.8 billion and missed the consensus estimate of $22.4 billion.
Segment-wise, revenues for Ag Services & Oilseeds fell 7.3% year over year and Carbohydrate Solutions’ revenues dropped 24.1% year over year. Also, Nutrition witnessed a year-over-year revenue dip of 0.9%.
Archer Daniels Midland Company Price, Consensus and EPS Surprise
Meanwhile, we projected revenues for Ag Services & Oilseeds and Carbohydrate Solution segments to decline 7.9% and 9.1%, respectively. We estimated Nutrition revenues to drop 2%.
The gross profit decreased 19% year over year to $1.7 billion but exceeded our estimate of $1.6 billion. Meanwhile, the gross margin fell 100 basis points to 7.6% in the quarter. The metric fared better than our estimate of 7.1%. SG&A expenses rose 7.9% year over year to $951 million. We expected SG&A expenses to edge up 1.3%.
Archer Daniels reported an adjusted segmental operating profit of $1.3 billion, down 24% from the year-ago quarter. On a GAAP basis, ADM’s segmental operating profit fell 24% year over year to $1.3 billion.
Segmental Operating Profit
Adjusted operating profit for Ag Services & Oilseeds fell 29% year over year to $864 million. The decline was driven by the stabilization of trade flows leading to lower Global Trade and risk management results year over year. Slow farmer selling hurt export volumes and margins in South America. In the Crushing subsegment, operating profit fell 27% year over year as increased imports of used cooking oil and the anticipation of large South American supplies weighed on North American soy crush margins. Equity earnings from Wilmar were about 37% higher year over year.
The Carbohydrate Solutions segment’s adjusted operating profit decreased 11% year over year to $248 million. The Starches and Sweeteners sub-segment fell $52 million as robust starches and sweeteners margins were offset by reduced domestic ethanol margins owing to strong industry production and elevated stocks, along with moderating margins in the EMEA region. In the Vantage Corn Processing subsegment, results improved by $21 million year over year on solid demand for sustainably certified exports of ethanol-supported volumes and increased margins.
In the Nutrition segment, the adjusted operating profit of $84 million plunged 39% from $138 million in the year-ago quarter. The Human Nutrition segment’s operating profit was $76 million, about $62 million lower than the year-ago period, due to the impacts of the unplanned downtime at Decatur East and a normalizing texturants market, which hurt margins. In the Animal Nutrition subsegment, operating profit of $8 million was higher year over year as cost-optimization efforts and reduced input costs boosted margins.
Other Financials
This current Zacks Rank #3 (Hold) player ended the quarter with cash and cash equivalents of $830 million; long-term debt, including current maturities, of $8.2 billion; and shareholders’ equity of $23.2 billion. As of Mar 31, 2024, ADM provided $700 million in cash for operating activities. It repurchased shares worth $1.3 billion and cash dividends of $257 million in first-quarter 2024.
We note that shares of ADM have increased 10.2% in the past three months compared with the industry’s 9.3% growth.
Management reaffirmed its earlier earnings per share (EPS) guidance for the full year. It still envisions adjusted EPS in the band of $5.25-$6.25 for the full year.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely Coca-Cola FEMSA (KOF - Free Report) , Vita Coco Company (COCO - Free Report) and Diageo (DEO - Free Report) .
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and EPS suggests growth of 10.7% and 25.1%, respectively, from the year-ago period’s reported figures. KOF has a trailing four-quarter negative earnings surprise of 2.1%, on average.
Vita Coco currently carries a Zacks Rank of 2. COCO's shares have risen 10.6% in the past three months. The company has a trailing four-quarter earnings surprise of 31.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings suggests growth of 1.8% and 24.3%, respectively, from the year-ago period’s reported figure.
Diageo currently carries a Zacks Rank of 2. DEO's shares have gained 3.4% in the past three months.
The Zacks Consensus Estimate for Diageo’s current financial-year sales suggests growth of 11% from the year-ago period's reported figures. The consensus mark for the company’s EPS indicates a decline of 8.2% from the year-ago quarter’s actual.
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Archer Daniels (ADM) Q1 Earnings Beat Estimates, Revenues Down
Archer Daniels Midland Company (ADM - Free Report) posted first-quarter 2024 results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. Both metrics declined year over year.
Adjusted earnings of $1.46 per share in the first quarter outpaced the Zacks Consensus Estimate of $1.35. However, the figure declined 30% from earnings of $2.09 per share in the year-ago quarter. On a reported basis, Archer Daniels’ earnings were $1.42 per share, down 33% from the year-ago quarter’s $2.12.
Revenues fell 9.5% year over year to $21.8 billion and missed the consensus estimate of $22.4 billion.
Segment-wise, revenues for Ag Services & Oilseeds fell 7.3% year over year and Carbohydrate Solutions’ revenues dropped 24.1% year over year. Also, Nutrition witnessed a year-over-year revenue dip of 0.9%.
Archer Daniels Midland Company Price, Consensus and EPS Surprise
Archer Daniels Midland Company price-consensus-eps-surprise-chart | Archer Daniels Midland Company Quote
Meanwhile, we projected revenues for Ag Services & Oilseeds and Carbohydrate Solution segments to decline 7.9% and 9.1%, respectively. We estimated Nutrition revenues to drop 2%.
The gross profit decreased 19% year over year to $1.7 billion but exceeded our estimate of $1.6 billion. Meanwhile, the gross margin fell 100 basis points to 7.6% in the quarter. The metric fared better than our estimate of 7.1%. SG&A expenses rose 7.9% year over year to $951 million. We expected SG&A expenses to edge up 1.3%.
Archer Daniels reported an adjusted segmental operating profit of $1.3 billion, down 24% from the year-ago quarter. On a GAAP basis, ADM’s segmental operating profit fell 24% year over year to $1.3 billion.
Segmental Operating Profit
Adjusted operating profit for Ag Services & Oilseeds fell 29% year over year to $864 million. The decline was driven by the stabilization of trade flows leading to lower Global Trade and risk management results year over year. Slow farmer selling hurt export volumes and margins in South America. In the Crushing subsegment, operating profit fell 27% year over year as increased imports of used cooking oil and the anticipation of large South American supplies weighed on North American soy crush margins. Equity earnings from Wilmar were about 37% higher year over year.
The Carbohydrate Solutions segment’s adjusted operating profit decreased 11% year over year to $248 million. The Starches and Sweeteners sub-segment fell $52 million as robust starches and sweeteners margins were offset by reduced domestic ethanol margins owing to strong industry production and elevated stocks, along with moderating margins in the EMEA region. In the Vantage Corn Processing subsegment, results improved by $21 million year over year on solid demand for sustainably certified exports of ethanol-supported volumes and increased margins.
In the Nutrition segment, the adjusted operating profit of $84 million plunged 39% from $138 million in the year-ago quarter. The Human Nutrition segment’s operating profit was $76 million, about $62 million lower than the year-ago period, due to the impacts of the unplanned downtime at Decatur East and a normalizing texturants market, which hurt margins. In the Animal Nutrition subsegment, operating profit of $8 million was higher year over year as cost-optimization efforts and reduced input costs boosted margins.
Other Financials
This current Zacks Rank #3 (Hold) player ended the quarter with cash and cash equivalents of $830 million; long-term debt, including current maturities, of $8.2 billion; and shareholders’ equity of $23.2 billion. As of Mar 31, 2024, ADM provided $700 million in cash for operating activities. It repurchased shares worth $1.3 billion and cash dividends of $257 million in first-quarter 2024.
We note that shares of ADM have increased 10.2% in the past three months compared with the industry’s 9.3% growth.
Management reaffirmed its earlier earnings per share (EPS) guidance for the full year. It still envisions adjusted EPS in the band of $5.25-$6.25 for the full year.
Stocks to Consider
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely Coca-Cola FEMSA (KOF - Free Report) , Vita Coco Company (COCO - Free Report) and Diageo (DEO - Free Report) .
Coca-Cola FEMSA currently has a Zacks Rank #2 (Buy). KOF's shares have rallied 5.7% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Coca-Cola FEMSA’s current financial-year sales and EPS suggests growth of 10.7% and 25.1%, respectively, from the year-ago period’s reported figures. KOF has a trailing four-quarter negative earnings surprise of 2.1%, on average.
Vita Coco currently carries a Zacks Rank of 2. COCO's shares have risen 10.6% in the past three months. The company has a trailing four-quarter earnings surprise of 31.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings suggests growth of 1.8% and 24.3%, respectively, from the year-ago period’s reported figure.
Diageo currently carries a Zacks Rank of 2. DEO's shares have gained 3.4% in the past three months.
The Zacks Consensus Estimate for Diageo’s current financial-year sales suggests growth of 11% from the year-ago period's reported figures. The consensus mark for the company’s EPS indicates a decline of 8.2% from the year-ago quarter’s actual.