Archer-Daniels-Midland 2025 Q1 Earnings Misses Targets as Net Income Drops 59%

Archer-Daniels-Midland(ADM) reported its fiscal 2025 Q1 earnings on May 06th, 2025. ADM's earnings for the first quarter fell below expectations, with adjusted earnings per share coming in at $0.70, slightly above the analyst estimate of $0.67. The company reaffirmed its full-year adjusted EPS guidance, expecting to reach the lower end due to current market conditions. Despite this, ADM's strategic initiatives aim to achieve significant cost savings and optimize operations across its business segments.

Revenue
Archer-Daniels-Midland experienced a revenue decline in 2025 Q1, falling by 7.7% to $20.18 billion compared to $21.85 billion in 2024 Q1. The Ag Services and Oilseeds segment generated revenue of $16.87 billion, Carbohydrate Solutions contributed $2.75 billion, and the Nutrition segment brought in $1.77 billion.

Earnings/Net Income
Archer-Daniels-Midland's EPS declined 57.0% to $0.61 in 2025 Q1 from $1.42 in 2024 Q1, while net income dropped 59.4% to $292 million, down from $719 million in 2024 Q1. The EPS performance was disappointing compared to the previous year.

Post-Earnings Price Action Review
The investment strategy of purchasing Archer-Daniels-Midland shares after a quarter of revenue growth and holding them for 30 days has yielded a return of 19.05% over the past five years. This is notably lower than the benchmark return of 83.12%. The strategy's compound annual growth rate (CAGR) stood at 3.59%, with a maximum drawdown of -5.35%. The Sharpe ratio of 0.71 suggests a reasonable risk-adjusted return, though it trails the broader market benchmark. The strategy reflects a cautious approach, highlighting the importance of assessing both short-term and long-term market conditions, as well as ADM’s operational resilience despite global trade uncertainties and policy challenges.

CEO Commentary
Juan Luciano, Chair of the Board and Chief Executive Officer, stated that ADM's first quarter results were aligned with expectations, with key segments showing positive momentum despite challenges from global trade uncertainties. He highlighted solid performance in Carbohydrate Solutions driven by sweeteners and ethanol, while Nutrition is recovering, particularly in Flavors and Animal Nutrition. Luciano emphasized the importance of their self-help agenda, which includes cost savings of $500 million to $750 million over the next three to five years, and the need to optimize operations across the business. He expressed confidence in the team's ability to navigate uncertainties and meet high expectations.

Guidance
ADM affirms its full-year adjusted EPS guidance of $4 to $4.75, expecting to be at the lower end due to current market conditions. The company anticipates lower operating profit for the Ag Services and Oilseeds segment compared to the previous year and provides directional guidance for Carbohydrate Solutions and Nutrition, which remains unchanged. The firm expects to achieve $200 million to $300 million in cost savings this year and will continue to monitor consumer demand closely while managing capital discipline.

Additional News
In the past few weeks, Archer-Daniels-Midland has been actively addressing challenges beyond its earnings. The company announced a strategic workforce reduction, aiming to cut up to 700 jobs as part of its plan to achieve $500 million to $750 million in cost savings over the next three to five years. This move is designed to streamline operations amid ongoing market difficulties, including trade tensions and biofuel policy uncertainties. Additionally, ADM increased its quarterly dividend by 2%, reflecting its commitment to returning value to shareholders even in challenging times. The company continues to focus on optimizing its portfolio and enhancing its operational performance to ensure long-term sustainable growth.