
Neeta Satham via Bloomberg
What you need to know
- Archer-Daniels-Midland missed fourth-quarter earnings and revenue estimates as oilseed demand weakened.
- Operating profit for the Crushing Subsegment of this agriculture commodities company fell by 46% on an annual basis.
- ADM intends to save $500-750 million over the course of three-five years.
Archer-Daniels-Midland (ADM) shares lost ground Tuesday when the producer of agricultural commodities posted weaker-than-expected results and said it would be eliminating jobs to cut costs on slumping oilseeds profits as concerns grow about the future of biofuels.
ADM’s adjusted fourth quarter earnings per share (EPS), which were $1.14 with revenues down by more than 6% at $21.5 billion, was reported. Visible Alpha’s forecasts were not met by either company.
Operating profit at the company’s Ag Services & Oilseed division slumped 32% to $644 million. The company reported that “Crushing subsegment operating profit was (46)% lower versus the prior year quarter, as increased industry run rates, higher manufacturing costs, and biofuel and trade policy uncertainty drove lower executed crush margins in North America.”
Carbohydrate Solutions’ operating profit increased by 3% and reached $319 million. Nutrition, which had an operating loss in 2017, saw a $88-million increase.
ADM will eliminate 600-700 jobs this year
CEO Juan Luciano said the company faced "softer market conditions and policy uncertainty around the world going into 2025," and would be taking steps to slash costs by $500 million to $750 million over the next three to five years. ADM will eliminate between 600 and 700 jobs in order to achieve this goal by 2025.
Shares of Archer-Daniels-Midland fell 4% to trade at their lowest level in more than four years.
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