Summary
Archer-Daniels-Midland Company (ADM) reported its third-quarter and year-to-date results for the period ending September 30, 2020. For the third quarter, the company saw a decrease in net earnings attributable to controlling interests to $225 million ($0.40 per diluted share) from $407 million ($0.72 per diluted share) in the prior year quarter. This decline was primarily driven by significant early debt retirement charges and a mark-to-market loss on exchangeable bonds, which heavily impacted corporate results. However, segment operating profit showed an increase, reflecting stronger performance across most business segments, particularly in Nutrition and Carbohydrate Solutions. For the first nine months of the year, net earnings attributable to controlling interests rose to $1.085 billion ($1.93 per diluted share) from $875 million ($1.55 per diluted share) in the same period last year, demonstrating resilience and growth despite the challenging economic environment. The company experienced a notable increase in debt extinguishment charges due to proactive liability management aimed at capitalizing on low interest rates. This, coupled with a $396 million charge for early debt retirement and a $15 million mark-to-market loss on exchangeable bonds in the third quarter, significantly weighed down overall net earnings. Despite these extraordinary items, the underlying operational performance across segments, particularly Nutrition and Carbohydrate Solutions, showed positive momentum. The Ag Services and Oilseeds segment faced headwinds from lower sales volumes, but strength in commodity prices and improved margins in certain areas provided some offset. The company's strong cash flow generation and robust liquidity position remain key strengths, providing flexibility to navigate the ongoing economic uncertainties.
Financial Highlights
49 data points| Revenue | $15.13B |
| Cost of Revenue | $14.08B |
| Gross Profit | $1.04B |
| SG&A Expenses | $636.00M |
| Interest Expense | $100.00M |
| Net Income | $225.00M |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.40 |
| Shares Outstanding (Basic) | 561.00M |
| Shares Outstanding (Diluted) | 562.00M |
Key Highlights
- 1Net earnings attributable to controlling interests decreased 44.7% to $225 million in Q3 2020, impacted by significant debt extinguishment charges ($396 million) and a mark-to-market loss on exchangeable bonds ($15 million).
- 2Diluted EPS decreased to $0.40 in Q3 2020 from $0.72 in Q3 2019.
- 3For the nine months ended September 30, 2020, net earnings attributable to controlling interests increased 24.0% to $1.085 billion ($1.93 per diluted share), compared to $875 million ($1.55 per diluted share) in the prior year.
- 4Segment operating profit increased 19.3% to $904 million in Q3 2020, driven by strong performance in Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition segments.
- 5Revenues decreased 9.6% to $15.1 billion in Q3 2020, primarily due to lower sales volumes across Ag Services and Oilseeds and Carbohydrate Solutions segments.
- 6The company successfully managed its debt by issuing new notes and completing significant debt repurchases and redemptions in Q3 2020, taking advantage of favorable credit market conditions.
- 7Cash used in operating activities for the nine months was $1.5 billion, a significant improvement from $3.6 billion used in the prior year period.