ADM Q1 Earnings Beat Estimates, Lower Revenues Across Segments Hurt

Core Insights - Archer Daniels Midland Company (ADM) reported mixed first-quarter 2025 results, with adjusted earnings per share of 70 cents surpassing the Zacks Consensus Estimate of 69 cents, but revenues fell short of expectations [1][2][3] Financial Performance - Adjusted earnings decreased from $1.46 per share in the year-ago quarter to 70 cents, while reported earnings fell from$ 1.42 to 61 cents [2][3] - Revenues declined 7.3% year over year to $20.2 billion, missing the consensus estimate of$ 20.7 billion, impacted by lower revenues across all segments [3][4] - Gross profit decreased 29.4% year over year to $1.2 billion, with gross margin falling 190 basis points to 5.9% [5] Segment Performance - Ag Services & Oilseeds revenues fell 9% year over year to$ 15.7 billion, while Carbohydrate Solutions revenues decreased 6.2% to $2.6 billion, and Nutrition revenues dipped 1% to$ 1.8 billion [4] - Adjusted operating profit for Ag Services & Oilseeds plunged 52% year over year to $412 million, affected by lower volumes and margins due to tariff and trade policy uncertainty [6] - Crushing subsegment's operating profit dropped 85% year over year, influenced by lower margins and increased manufacturing costs [7] - Carbohydrate Solutions segment's operating profit dipped 3% to$ 240 million, with mixed performance across subsegments [9] - Nutrition segment reported an adjusted operating profit of $95 million, up 13% year over year, driven by improvements in Flavors and Animal Nutrition [10] Other Financials - As of March 31, 2025, ADM had cash and cash equivalents of$ 864 million, long-term debt of $8.3 billion, and shareholders' equity of$ 22.1 billion [12] - The company used $342 million in cash for operating activities and paid dividends of$ 247 million in the reported quarter [12] Future Outlook - For 2025, management anticipates adjusted earnings per share to be in the range of $4 to$ 4.75, with expectations leaning towards the lower end [13]