Archer Daniels Midland Meets on the Top Line, Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

Archer Daniels Midland (NYS: ADM) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Archer Daniels Midland met expectations on revenue and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded, and GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
Archer Daniels Midland reported revenue of $23.31 billion. The six analysts polled by S&P Capital IQ hoped for revenue of $23.51 billion. Sales were 11% higher than the prior-year quarter's $20.93 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.51. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.77 per share on the same basis. GAAP EPS of $0.12 for Q2 were 89% lower than the prior-year quarter's $1.14 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 3.5%, 240 basis points worse than the prior-year quarter. Operating margin was 1.7%, 220 basis points worse than the prior-year quarter. Net margin was 0.3%, 320 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $21.65 billion. On the bottom line, the average EPS estimate is $0.77.

Next year's average estimate for revenue is $89.05 billion. The average EPS estimate is $2.95.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Archer Daniels Midland is hold, with an average price target of $34.23.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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