- On Tuesday, Archer Daniels Midland Co. reported adjusted earnings per share of 42 cents, down from 78 cents in the same period last year. Adjusted segment operating profit was $573 million, down 36% from $892 million in the same period last year.
- Sales at ADM, one of the world’s leading agribusiness companies, fell 18% to $14.4 billion in the first quarter, trailing the $15.9 billion Zacks estimate.
- The market challenges in the first quarter had a large impact on the company’s ag services. Challenging market conditions are expected to continue for the first half of the year. Company officials believe changing market dynamics, with reduced South American soybean and corn production, could present opportunities in the second half of the year.
ADM continues to advance its strategic plan, including a controlling stake in Harvest Innovations, which strengthens the company’s plant protein, gluten-free ingredient portfolio. With the purchase of Harvest Innovations, ADM advances its plans to expand from an ingredient supplier to a complete solution provider.
The company has sold assets such as its cocoa business in October 2015. It has also entered a deal to sell its sugar cane ethanol operations in Brazil. "The company is seeking to improve its global footprint in merchandising and commodity processing, while expanding into downstream specialties that offer greater stability and higher margins," according to Moody’s Investors Service’s credit opinion released in March. "We note that ADM has divested a number of underperforming businesses to fund acquisitions and we expect management to continue to utilize this strategy."
Additionally, the company has opened a new flavor creation, application and customer innovation center in Cranbury, N.J. The innovation center aims to engage customers in the process of developing products and applications.
ADM joins fellow industry member Cargill in fostering partnerships with customers at innovation centers to develop reformulations of ingredients or to create new products.
Cargill recently sold its dressings, sauces, and mayonnaise business to Ventura Foods, a producer of custom and dressings, sauces, mayonnaises, oils and other flavorings.