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Archer Daniels (ADM) Posts Dismal Q1 Earnings & Sales

Archer Daniels Midland Company ADM, a leading player in the global food processing industry, released first-quarter 2016 results, wherein adjusted earnings of 42 cents a share missed the Zacks Consensus Estimate by a penny and plunged 46% from 78 cents earned in the year-ago quarter.

Earnings Estimate Revision: The Zacks Consensus Estimate for 2016 and 2017 has been portraying a downtrend over the past 30 days. Moreover, Archer Daniels’ performance in the trailing four quarters (excluding the quarter under review) gives a negative picture, with an average surprise miss of 5.2%.

Revenues: Archer Daniels generated net sales of $14,384 million, which was down 17.8% year over year and missed the Zacks Consensus Estimate of $15,394 million owing to decline at all of its operating segments.

Key Events: Archer Daniels acquired controlling stake in a leading producer of non-GMO, organic and gluten-free ingredients, named Harvest Innovations. The company also announced the buyout of a corn wet mill in Morocco and entered into a deal to sell its Brazilian sugarcane ethanol operations.

Management attained approximately $50 million of run-rate savings in the reported quarter and remains on track to achieve the goal of $275 million by calendar end. The company bought back about $300 million of shares in the quarter.
 
Zacks Rank: Currently, Archer Daniels carries a Zacks Rank #5 (Strong Sell) which is subject to change based on the just released earnings results.

Stock Movement: Archer Daniels’ shares are down nearly 2% during pre-market trading hours following the earnings release. Clearly, a negative sentiment is palpable among investors following the company’s disappointing performance.

Check back later for our full write up on Archer Daniels’ earnings report!

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ARCHER DANIELS (ADM): Free Stock Analysis Report
 
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