What's Going On With Archer-Daniels-Midland Shares Today?

Archer-Daniels-Midland Co ADM shares are trading higher after it reported its fourth quarter FY23 results.

Revenues declined 11.4% year-on-year to $22.98 billion, missing the analyst consensus estimate of $23.64 billion.

Revenues from Ag Services and Oilseeds fell 10.7% Y/Y, Carbohydrate Solutions decreased 19.4%, and Nutrition dropped 6.7%.

Gross profit decreased 1.2% Y/Y to $1.74 billion with a margin of 7.6%. Selling, general and administrative expenses rose 2.5% to $919 million.

Adjusted segment operating margin was 6.1%, and adjusted segment operating income for the quarter fell 16% to $1.4 billion.

Adjusted EPS of $1.36 missed the analyst consensus of $1.43.

The company held $1.37 billion in cash and equivalents as of Dec. 31, 2023.

ADM’s Board has authorized management to repurchase an additional $2 billion of the company’s shares under its existing 200 million share repurchase program that runs through 2024.

As of December 31, 2023, ADM had approximately 52 million shares remaining for repurchase under its existing 200 million share program, which commenced in 2015.

Outlook: ADM sees FY24 adjusted EPS of $5.25 – $6.25 against an estimate of $5.87.

Update on Investigation: ADM also provided an update regarding certain accounting practices. The investigation was initially disclosed in January 2024.

The company has identified and corrected certain intersegment sales that occurred between its Nutrition reporting segment and the Ag Services and Oilseeds and Carbohydrate Solutions reporting segments that were not recorded at amounts approximating market.

The adjustments related to the company’s reporting segments do not impact its consolidated statement of earnings.

The company has identified a material weakness in its internal control over financial reporting related to its accounting practices and procedures for intersegment sales.

ADM said it continues cooperating with the SEC and the DOJ in this matter.

Price Action: ADM shares are trading higher by 4.46% at $57.36 on the last check Tuesday.