ADM Q1 Earnings Beat Estimates, Lower Revenues Across Segments Hurt

Archer Daniels Midland Company ADM posted mixed first-quarter 2025 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed. Both the metrics declined on a year-over-year basis.

Adjusted earnings of 70 cents per share surpassed the Zacks Consensus Estimate of 69 cents. However, the figure decreased from earnings of $1.46 per share in the year-ago quarter. On a reported basis, Archer Daniels’ earnings were 61 cents per share, down from $1.42 recorded in the year-ago quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

An Insight Into ADM’s Q1 Performance

Revenues fell 7.3% year over year to $20.2 billion and lagged the consensus estimate of $20.7 billion. The top line was hurt by lower revenues across all its segments.

Archer Daniels Midland Company Price and EPS Surprise

Archer Daniels Midland Company price-eps-surprise | Archer Daniels Midland Company Quote

Segment-wise, revenues for Ag Services & Oilseeds fell 9% year over year to $15.7 billion, while Carbohydrate Solutions’ revenues decreased 6.2% year over year to $2.6 billion. Nutrition’s revenues dipped 1% year over year to $1.8 billion. The Zacks Consensus Estimate for the segments’ revenues was pegged $16.1 billion, $2.7 billion and $1.9 billion, respectively.

The gross profit decreased 29.4% year over year to $1.2 billion while the gross margin fell 190 basis points to 5.9%. Selling, general, and administrative expenses fell 2% year over year to $932 million.

Archer Daniels reported adjusted segmental operating profit of $747 million, down 38% from the year-ago quarter.

The company has a trailing four-quarter return on invested capital of 7%, on an adjusted basis.

ADM’s Segmental Operating Profit

Adjusted operating profit for Ag Services & Oilseeds plunged 52% year over year to $412 million. The Ag Services subsegment’s operating profit fell 31%, owing to lower volumes and margins, due to tariff and trade policy uncertainty. Margins were also hurt by negative mark-to-market timing effects. These were partly offset by increased destination marketing volumes and related margins during the quarter.

The Crushing subsegment’s operating profit dropped 85% year over year on lower margins on elevated industry capacity, competitive meal exports from Argentina, increased manufacturing costs and reduced vegetable oil demand owing to biofuel and trade policy uncertainty. There were about $4 million of net positive mark-to-market timing impacts in the quarter.

The Refined Products & Other subsegment’s operating profit declined 21%, as biofuel and trade policy uncertainty hurt biodiesel margins. Weak oil demand and higher crush capacity also adversely affected refining margins year over year. In the reported quarter, there were nearly $4 million of net favorable mark-to-market timing effects against approximately $30 million of net negative impacts in the year-ago quarter. Equity earnings from ADM’s investment in Wilmar were about 52% lower year over year.

The Carbohydrate Solutions segment’s operating profit dipped 3% year over year to $240 million. The Starches and Sweeteners sub-segment fell 21% year over year on lower North America starch margins, reduced EMEA Starches and Sweeteners volumes and margins, and increased manufacturing costs. North America liquid sweetener margins and global wheat milling margins and volumes were better on a year-over-year basis. In the Vantage Corn Processing subsegment, operating profit rose on increased ethanol volumes and better margins.

The Nutrition segment reported an adjusted operating profit of $95 million, up 13% from the year-ago quarter, backed by Flavors, Animal Nutrition, excluding Pet, and timing-associated incentive compensation adjustments. The Human Nutrition subsegment’s operating profit was $75 million compared with $76 million in the prior-year quarter. In Flavors, operating profit increased on improved volumes and margins in North America and EMEA. 

In Specialty Ingredients, operating profit fell, due to reduced margins. In Health & Wellness, operating profit dipped on certain negative valuation adjustments. In the Animal Nutrition subsegment, operating profit was $20 million, higher 150% year over year, buoyed by cost-optimization actions and better market conditions resulting in higher margins.

Archer Daniels’ Other Financials

This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $864 million; long-term debt, including current maturities, of $8.3 billion; and shareholders’ equity of $22.1 billion. As of March 31, 2025, ADM used $342 million in cash for operating activities. It paid dividends of $247 million in the reported quarter.

For 2025, management envisions adjusted earnings per share to be in the band of $4-$4.75. However, the metric is currently expected to come at the lower end.

We note that shares of ADM have gained 9% in the past three months against the industry’s 0.9% decline.

Stocks to Consider in the Consumer Staples Space

Nomad Foods NOMD, which manufactures frozen foods, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NOMD delivered a trailing four-quarter earnings surprise of 5%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year earnings per share (EPS) indicates growth of 3.1% from the year-ago number.

United Natural Foods UNFI, which is a distributor of natural, organic and specialty food in the United States, currently carries a Zacks Rank #2 (Buy). 

UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average. The Zacks Consensus Estimate for UNFI’s current financial-year sales and EPS indicates growth of 1.9% and 485.7%, respectively, from the year-ago numbers.

Utz Brands UTZ manufactures salty snacks under popular brands and has a Zacks Rank of 2 at present. UTZ delivered a trailing four-quarter average earnings surprise of 8.8%.

The Zacks Consensus Estimate for UTZ’s current financial-year sales and EPS implies growth of 1.2% and 10.4%, respectively, from the year-ago numbers.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research