Archer Daniels Midland Co. Earnings Cheat Sheet: Fifth Consecutive Quarter of Double-Digit Revenue Growth

The Cheat Sheet

S&P 500 component Archer Daniels Midland Co. reported higher profit for the first quarter as revenue showed growth. Archer Daniels Midland processes feedstuffs including oilseeds, cocoa, corn, and wheat. The company also manufactures vegetable oil and protein meal, corn sweeteners, flour, ethanol, biodiesel, and other food and feed ingredients.

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Archer Daniels Midland Earnings Cheat Sheet for the First Quarter

Results: Net income for the farm products company rose to $460 million (68 cents per share) vs. $345 million (54 cents per share) in the same quarter a year earlier. This marks a rise of 33.3% from the year earlier quarter.

Revenue: Rose 30.4% to $21.9 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ADM reported adjusted net income of 58 cents per share. By that measure, the company fell short of mean estimate of 69 cents per share. It beat the average revenue estimate of $18.93 billion.

Quoting Management: “The first quarter presented a difficult and challenging market environment,” said ADM Chairman and CEO Patricia Woertz. “Margin conditions in our global oilseeds segment were generally weak, and net corn costs were high. We offset some of these pressures with good management of our commodity positions and by capturing opportunities through our broad and diverse portfolio.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 30.5%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 45.6% from the year earlier quarter.

The company has now fallen short of estimates in the last two quarters. In the fourth quarter of the last fiscal year, it missed expectations by 26 cents with net income of 58 cents versus a mean estimate of net income of 84 cents per share.

Net income has increased 10.9% year over year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 37.3% from the year earlier quarter.

The company’s cost of sales rose 30.5% from a year earlier. Last quarter, cost of sales was 95.3% of revenue, similar to a year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 99 cents a share to 78 cents over the last ninety days. At $3.07 per share, the average estimate for the fiscal year has fallen from $3.38 ninety days ago.

Competitors to Watch: Bunge Limited , MGP Ingredients, Inc. , Corn Products Intl., Inc. , CHS Inc. , General Mills, Inc. , SunOpta, Inc. , Gruma S.A.B. de C.V. , TreeHouse Foods Inc. , Seaboard Corporation , and Alexandria Mills & Bakeries Co. (AFMC).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)

 

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