ADM (ADM) Down 0.2% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Archer Daniels Midland (ADM). Shares have lost about 0.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is ADM due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Archer Daniels Midland Company before we dive into how investors and analysts have reacted as of late.

Archer Daniels Q4 Earnings Beat Estimates, Lower Segment Sales Hurt

Archer Daniels Midland posted fourth-quarter 2025 results, wherein the top line fell short of the Zacks Consensus Estimate and declined year over year. Meanwhile, earnings surpassed the Zacks Consensus Estimate but declined from the same period last year.

Insight Into ADM’s Q4 Performance

Adjusted earnings of 87 cents per share surpassed the Zacks Consensus Estimate of 83 cents. However, the figure decreased from adjusted earnings of $1.14 per share in the year-ago quarter. On a reported basis, Archer Daniels’ third-quarter earnings were 94 cents per share, down from $1.17 per share reported in the year-ago quarter.

Revenues declined 13.7% year over year to $18.6 billion and lagged the consensus estimate of $22.3 billion.

Segment-wise, revenues for Ag Services & Oilseeds fell 16.9% year over year to $14 billion, while Carbohydrate Solutions’ revenues decreased 3.9% year over year to $2.6 billion. Nutrition’s revenues rose 0.7% year over year to $1.8 billion. Revenues from Other Business are almost flat at $117 million compared with the figure in the prior-year period.

The gross profit decreased 10.7% year over year to $1.2 billion, while the gross margin stood at 6.5%. Selling, general and administrative expenses declined to $893 million from $943 million in the year-ago quarter.

Archer Daniels reported adjusted segmental operating profit of $821 million, down 22% from the year-ago quarter.

The company has a trailing four-quarter return on invested capital of 6.3% on an adjusted basis.

ADM’s Segmental Operating Profit

Adjusted operating profit for Ag Services & Oilseeds dropped 31% year over year to $444 million. The Ag Services subsegment’s operating profit declined 31% year over year, primarily reflecting lower soybean export activity from North America and unfavorable mark-to-market impacts.  This quarter included $1 million in net negative mark-to-market impacts, versus $50 million in net positive impacts in the prior-year period.

The Crushing subsegment’s operating profit plunged 69% year over year as weaker crush margins in both North and South America more than offset higher global crush volumes. Results were further pressured by approximately $20 million in net negative mark-to-market impacts during the quarter, compared with a neutral impact in the prior-year period. 

Refined Products and Other operating profit were down 2% from the prior year due to lower refining margins. Margins were pressured by weaker food demand and softer fuel demand amid delayed clarity on U.S. biofuel policy. The quarter included approximately $22 million in net positive mark-to-market impacts, compared with roughly $50 million in net negative impacts in the prior-year period, which partially offset the margin pressure. Equity earnings from ADM’s investment in Wilmar were about 49% higher year over year.

The Carbohydrate Solutions segment posted an operating profit of $299 million in the fourth quarter of 2025, reflecting a 6% decline from the year-ago period. Operating profit in the Starches & Sweeteners subsegment also fell 16% due to lower global S&S demand, which pressured both volumes and margins. The subsegment also continued to face higher corn costs in EMEA stemming from corn quality issues, further weighing on profitability.

Results were further impacted by a tougher comparison, as the prior-year quarter reflected $37 million in insurance proceeds from the Decatur East and West claims, compared with only $4 million related to the Decatur West claim in the fourth quarter of 2025.

Vantage Corn Processors’ subsegment operating profit surged 187% year over year, supported by firm ethanol industry margins during October and November, followed by a typical seasonal decline in December. Strong export demand reduced industry inventories on a year-over-year basis, partially offsetting domestic seasonal softness.

The Nutrition segment reported an operating profit of $78 million in the fourth quarter of 2025, marking an 11% decrease from the same period last year. Operating profit in the Human Nutrition subsegment fell 10% year over year, largely reflecting the absence of insurance proceeds. Within this segment, Flavors’ operating profit increased, driven primarily by strong sales in North America, with additional support from Europe and Asia Pacific. Specialty Ingredients continued its recovery over the course of the quarter, while Health & Wellness posted lower operating profit, mainly due to strategic actions aimed at normalizing inventory levels and optimizing cash flow.

Meanwhile, the Animal Nutrition subsegment’s operating profit decreased 15% year over year, primarily due to localized volume softness and the impact of one-time items.

Archer Daniels’ Other Financials

The company ended 2025 with cash and cash equivalents of $1.02 billion, long-term debt, including current maturities, of $7.6 billion, and shareholders’ equity of $34.7 billion. As of Dec. 31, 2025, ADM generated $5.45 billion in cash from operating activities. It paid out dividends of $987 million during 2025.

Given a balanced approach to capital allocation, management has announced a 2% hike in the quarterly dividend. The company’s board has declared a cash dividend of 52 cents per share, up from 51 cents per share. This is payable Mar. 10, 2026, to its shareholders of record as of Feb. 17. This is the company’s 94th straight year of uninterrupted dividends.

ADM’s 2026 Outlook

For 2026, ADM expects adjusted EPS of approximately $3.60-$4.25. The lower end of the range reflects continued deferral of U.S. biofuel policy clarity and largely flat crush margins, while the upper end assumes sustained crush margin expansion, progress on manufacturing efficiency initiatives and strengthening customer demand.

From a segment perspective, the outlook for 2026 assumes year-over-year operating profit growth in Ag Services & Oilseeds, supported by improving global trade flows and a range of potential crush margin outcomes. Carbohydrate Solutions’ operating profit is expected to remain flat, as reduced starches and sweeteners volumes and pricing are offset by higher ethanol margins. Nutrition is anticipated to continue delivering stronger organic growth and improved execution.

Capital expenditures for 2026 are projected to be in the range of $1.3-$1.5 billion, reflecting continued investment in strategic priorities and operational efficiencies.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -8.44% due to these changes.

VGM Scores

At this time, ADM has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, ADM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

ADM belongs to the Zacks Agriculture - Operations industry. Another stock from the same industry, Scotts Miracle-Gro (SMG), has gained 6.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Scotts reported revenues of $354.4 million in the last reported quarter, representing a year-over-year change of -15%. EPS of -$0.77 for the same period compares with -$0.89 a year ago.

For the current quarter, Scotts is expected to post earnings of $3.93 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Scotts. Also, the stock has a VGM Score of D.

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This article originally published on Zacks Investment Research (zacks.com).

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