Archer-Daniels Midland: Challenges in the Third Quarter Pressure Stock Price

The shares of the agricultural company Archer-Daniels Midland experienced a significant price decline of nearly 6% in pre-market trading after the company released a preliminary quarterly report indicating difficulties in several business areas. ADM reported a net profit of 18 million dollars for the third quarter, while the adjusted net profit was 530 million dollars, representing a year-over-year decline. Noteworthy was a non-cash charge of 461 million dollars triggered by a valuation adjustment of the stake in Wilmar. CEO Juan Luciano described the quarter as 'challenging' and pointed to mixed results across the various business segments. While the carbohydrate solutions division performed well, the agricultural services and oilseeds, as well as nutrition segments, fell short of expectations. Luciano attributed the decline to 'softer-than-expected market conditions' and a slower-than-hoped improvement in certain business sectors. Earnings per share (EPS) are stated at 0.04 dollars, adjusted at 1.09 dollars, both values declining compared to the previous year. In light of the current challenges, ADM has adjusted its full-year forecast and now expects an adjusted EPS between 4.50 and 5.00 dollars per share. Compounding the situation, ADM announced its intention to refile its annual report for fiscal year 2023 and the reports for the first two quarters of 2024, while the planned third-quarter conference call has been suspended. These adjustments, required due to errors in segment reporting, are expected to have only a minor impact on the consolidated financial results but highlight ongoing issues with financial controls.