ADM(ADM) - 2024 Q2 - Quarterly Results

Financial Performance - Reported EPS for Q2 2024 was $0.98, with adjusted EPS at $1.03, reflecting a 46% decrease year-over-year[1] - Net earnings for Q2 2024 were $486 million, while adjusted net earnings were $508 million, down 47% compared to the previous year[2] - Revenues for the quarter ended June 30, 2024, were $22,248 million, a decrease of 11.5% compared to $25,190 million for the same quarter in 2023[45] - Net earnings attributable to the company for the quarter were $486 million, down 47.5% from $927 million in the same quarter last year[46] - Diluted earnings per share for the quarter were $0.98, compared to $1.70 in the prior year, reflecting a 42.4% decline[46] - Gross profit for the quarter was $1,396 million, a decrease of 26% from $1,883 million in the same quarter of 2023[45] Segment Performance - Segment operating profit for Q2 2024 was $1,014 million, a 34% decrease from Q2 2023, with adjusted segment operating profit at $1,021 million, down 37%[5] - Ag Services & Oilseeds segment operating profit fell to $459 million in Q2 2024, a 56% decline from the prior year[12] - Carbohydrate Solutions segment operating profit increased by 12% to $357 million in Q2 2024, driven by strong starches and sweeteners margins[16] - Nutrition segment operating profit decreased by 36% to $109 million in Q2 2024, primarily due to unplanned downtime and higher manufacturing costs[18] - For the first half of 2024, adjusted segment operating profit was $2,338 million, a 30% decrease compared to the same period in 2023[9] - The Ag Services and Oilseeds segment reported an operating profit of $459 million for the quarter, down from $1,054 million, a decline of $595 million[34] - The Carbohydrate Solutions segment saw an increase in operating profit to $357 million from $319 million, an increase of $38 million[34] Cash Flow and Capital Management - The company reported total operating activities cash flow of $1,168 million for the six months ended June 30, 2024, compared to $899 million for the same period in 2023, an increase of 30%[41] - Total investing activities resulted in a cash outflow of $1,612 million for the six months ended June 30, 2024, compared to $611 million in the prior year[41] - Total cash and cash equivalents decreased to $764 million from $1,426 million, representing a decline of 46.6% year-over-year[40] - Operating working capital as of June 30, 2024, was $9,827 million, down from $10,898 million a year earlier, indicating a reduction of 9.8%[40] - Shareholders' equity decreased to $22,159 million as of June 30, 2024, down from $24,975 million a year earlier, reflecting a decline of 11.3%[40] Costs and Expenses - Corporate unallocated costs increased due to higher global technology investments and legal fees, impacting overall profitability[21] - Corporate unallocated costs for the quarter were $292 million, an increase of $30 million compared to $262 million in the same quarter of 2023[35] - Interest expense for the quarter was $128 million, a slight increase of $3 million from $125 million in the same quarter of 2023[35] Guidance and Future Outlook - The company affirms its adjusted earnings per share (EPS) guidance for the full year, expecting a range of $5.25 to $6.25[23] - The company is unable to present forecasted GAAP EPS due to uncertainties related to impairment, restructuring charges, and acquisition-related expenses[33] Return on Invested Capital - The trailing four-quarter average return on invested capital (ROIC) was 8.9%, with adjusted ROIC at 9.7%[2] - The company emphasizes the importance of adjusted return on invested capital (ROIC) as a measure of performance, comparing it to its weighted average cost of capital (WACC)[32] - Return on Invested Capital (ROIC) was reported at 8.9%, while Adjusted ROIC was 9.7%[52] - Total ROIC earnings for the four quarters ended June 30, 2024, amounted to $2,949 million[50] - Management believes that Adjusted ROIC provides better comparability of underlying business performance, excluding specified items[53] Depreciation and Amortization - The company reported a total of $1,104 million in depreciation and amortization for the four quarters ended June 30, 2024[56] - The company incurred impairment and restructuring charges totaling $268 million over the four quarters ended June 30, 2024[56] Adjusted Metrics - Adjusted net earnings and adjusted EPS are used to provide additional insights into the company's performance, excluding specified items[29] - Adjusted EBITDA for the four quarters ended June 30, 2024, totaled $5,146 million, with the latest quarter's adjusted EBITDA at $1,491 million[56] - Adjusted net earnings for the quarter ended September 30, 2023, were $821 million, with total ROIC earnings of $895 million[50] - Total invested capital as of September 30, 2023, was $33,574 million, with adjusted invested capital at $33,633 million[51]