Archer Daniels Midland (NYSE:ADM) reported fourth-quarter earnings that fell short of Wall Street expectations, with adjusted earnings per share (EPS) of $1.36 compared to the consensus estimate of $1.43. Revenue for the quarter was also below analyst forecasts, coming in at $22.98 billion against expectations of $23.64 billion. Despite the miss, the company's stock climbed 3.44%.
The agribusiness giant provided full-year 2024 adjusted EPS guidance in the range of $5.25 to $6.25, with the midpoint below the consensus estimate of $5.87. This projection reflects an 18% decrease at the midpoint from the company's 2023 performance, attributing the expected decline to moderating margin conditions and higher costs, which are likely to be partially offset by improved volumes.
ADM's fourth-quarter performance was impacted by lower pricing and execution margins, particularly due to lower crush and origination margins, which led to a $0.21 per share decline compared to the previous year. However, improved manufacturing costs, primarily from lower input and energy costs, contributed an increase of $0.18 per share. Unplanned downtime at the company's Decatur complex and lower equity earnings also negatively influenced the quarter's results.
For the full year, ADM reported an adjusted segment operating profit of $6,244 million, a 6% decrease from the previous year, with adjusted EPS of $6.98. The company cited various factors affecting its yearly performance, including volume declines, higher manufacturing costs, increased corporate costs due to higher interest rates, and lower equity earnings.
In addition to financial results, ADM announced a $2 billion share repurchase authorization, signaling confidence in the company's cash position and long-term strategy. This buyback is part of ADM's ongoing capital return program and is expected to be initiated promptly.
Looking ahead, ADM anticipates global grain and oilseed supply to increase, potentially easing commodity prices and adjusting trade flows disrupted in the past two years. The company predicts global soybean crush margins to decline, but expects vegetable oil demand growth from renewable diesel and modest soybean meal demand growth to support structural margin improvement. In its Carbohydrate Solutions and Nutrition segments, ADM forecasts strong volumes, lower energy costs, and mid-single-digit revenue growth, leading to higher operating income compared to 2023.
ADM's CEO commented on the results, stating, "Our team delivered solid performance in a challenging environment, and we remain focused on executing our strategy to drive superior returns." This statement reflects the company's resilience and strategic focus amidst market uncertainties.