10-QPeriod: Q1 FY2015

Archer-Daniels-Midland Co Quarterly Report for Q1 Ended Mar 31, 2015

Filed May 6, 2015For Securities:ADM

Summary

Archer-Daniels-Midland Co. (ADM) reported strong financial results for the first quarter of 2015, with net earnings attributable to controlling interests increasing significantly to $493 million, up from $267 million in the prior year period. This robust performance was driven by broad-based strength across its operating segments, particularly in Oilseeds Processing, which delivered outstanding results due to favorable market conditions and strong demand for meal. The Agricultural Services segment also showed improvement, benefiting from its global trade desk platform, while the newly formed Wild Flavors and Specialty Ingredients segment began to achieve expected synergies. Despite a notable decrease in overall revenues to $17.5 billion from $20.7 billion, primarily due to lower commodity prices and foreign currency translation impacts, the company demonstrated effective cost management. Cost of goods sold decreased substantially, and selling, general, and administrative expenses saw a moderate increase due to integration costs from recent acquisitions. ADM maintained a healthy liquidity position with significant unused lines of credit and generated positive cash flow from operations, underscoring its financial stability and capacity for continued growth and shareholder returns.

Financial Highlights

50 data points
Beta

Revenue

$17.51B

6.3% Gross Margin

Net Income

$493.00M

2.8% Net Margin

EPS (Diluted)

$0.77

Total Assets

$41.72B

Cash & Equivalents

$890.00M

Free Cash Flow

-$199.00M

Financial Statements
Beta
Revenue$17.51B
Cost of Revenue$16.40B
Gross Profit$1.10B
SG&A Expenses$498.00M
Interest Expense$81.00M
Net Income$493.00M
EPS (Basic)$0.78
EPS (Diluted)$0.77
Shares Outstanding (Basic)636.00M
Shares Outstanding (Diluted)639.00M

Key Highlights

  • 1Net earnings attributable to controlling interests rose to $493 million, a significant increase from $267 million in Q1 2014.
  • 2Total revenues decreased to $17.5 billion from $20.7 billion, primarily driven by lower commodity prices and foreign currency translation impacts.
  • 3Oilseeds Processing segment showed strong performance with record volumes and margins, contributing significantly to overall profitability.
  • 4Agricultural Services segment improved, driven by enhanced international merchandising results from its global trade desk.
  • 5The newly formed Wild Flavors and Specialty Ingredients segment performed well, indicating progress on synergy realization.
  • 6Operating profit for the quarter was $855 million, up from $691 million in the prior year, reflecting improved segment performance.
  • 7ADM generated $45 million in cash flow from operating activities, a substantial improvement from the prior year's $358 million used.

Frequently Asked Questions

The primary driver for the significant increase in net earnings was the strong performance across ADM's operating segments, particularly the Oilseeds Processing segment which benefited from favorable market conditions, record volumes in Europe and North America, and strong global margins. The Agricultural Services segment also contributed positively due to improved international merchandising results.

Total revenues decreased by approximately 15% primarily due to lower sales prices resulting from a decrease in underlying commodity prices and significant foreign currency translation impacts. While commodity price changes can affect revenues and cost of goods sold equally in some segments, impacting gross profit less directly, the overall revenue reduction reflects the lower market prices for commodities.

The global chocolate business sale to Cargill, Inc. and the global cocoa business sale to Olam International Limited were announced and expected to close in 2015. These businesses were classified as held for sale, and their assets and liabilities were reported separately. The financial results of these businesses, any adjustments to asset values, and the final gain or loss on disposal will be reported within the Oilseeds Processing segment.

The Wild Flavors and Specialty Ingredients segment, formed in early 2015 following acquisitions in late 2014, contributed positively to the quarter's results. Its operating profit increased by $10 million, reflecting the integration of the acquired businesses and the realization of identified cost and revenue synergies, with the segment reporting $606 million in revenues from external customers.