Why did ADM's earnings decline so significantly in 2024?

The decline was driven mainly by the Ag Services & Oilseeds segment, which fell 40%. Crush margins normalized as South American supply became ample, and Refined Products and Other margins fell sharply because of biofuel policy uncertainty, increased renewable diesel pre-treatment capacity, and higher imports of used cooking oil. Nutrition also fell 10%, mainly due to unplanned downtime at Decatur East and lower texturants pricing.

Why is GAAP EPS up in Q4 while adjusted EPS is down?

Q4 GAAP EPS of $1.17 benefited from a much lower diluted share count (484 million versus 531 million a year earlier) following share repurchases, and from items excluded from adjusted results such as impairment reversals and contingency reserve adjustments. Adjusted EPS of $1.14 fell 16% because underlying segment operating profit declined 16%, so the share count benefit did not offset weaker operations.

What does the 2025 guidance imply for investors?

Guidance for adjusted EPS of $4.00 to $4.75 implies further earnings pressure, roughly flat to down from the 2024 adjusted figure of $4.74 at the top of the range. ADM notes it cannot reasonably forecast GAAP EPS because of uncertain impairment, restructuring, and regulatory charges, so GAAP results could differ materially from the adjusted range.

How significant is the $500 to $750 million cost savings program?

The program equals roughly 3% to 5% of 2024 revenue-based cost structure over several years, and represents a meaningful but gradual lever. Management expects most savings on an annual run-rate basis through manufacturing cost improvements, lower purchased materials and services spend, and workforce reductions. Investors should watch execution and how much of the savings is reinvested or offset by inflation and weaker market conditions.

Are the dividend and capital returns secure despite weaker earnings?

The dividend was raised 2% to $0.51 per share, signaling management's confidence and commitment to shareholder returns. However, 2024 operating cash flow of $2.8 billion, combined with $985 million in dividends and $2.3 billion in share repurchases, exceeded free cash flow after $1.6 billion of capital expenditures, and the company drew on short-term lines of credit. Continued payouts at this level depend on a cash flow recovery in 2025.

ADM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 4, 2025. Cited figures are marked; the original filing is the authoritative source.

ADM reported fourth-quarter and full-year 2024 results on February 4, 2025, showing a sharp earnings decline.

Full-year GAAP net earnings attributable to ADM were $1.8 billion^a (EPS $3.65, down 43%), while adjusted EPS was $4.74 (down 32%). Total segment operating profit fell 28% to $4.2 billion, with the Ag Services & Oilseeds segment down 40% to $2.4 billion, driven by weaker crush margins and a sharp drop in Refined Products and Other margins amid biofuel and trade policy uncertainty. Carbohydrate Solutions was flat at $1.4 billion, and Nutrition declined 10% to $386 million.

Fourth-quarter adjusted EPS of $1.14^b fell 16% year over year, though GAAP EPS rose 10% on a lower share count and a favorable mix of specified items. Operating cash flow fell to $2.8 billion from $4.5 billion, and the full-year figures were also affected by roughly $231 million of Decatur East and West insurance settlements. Management guided 2025 adjusted EPS to $4.00 to $4.75, citing weaker market fundamentals and ongoing biofuel and trade policy uncertainty.

To address this, ADM announced targeted actions to deliver $500 to $750 million^c in cost savings over three to five years, including a targeted reduction of roughly 600 to 700 roles globally in 2025. The company also raised its quarterly dividend 2% to $0.51 per share, marking its 93rd consecutive year of uninterrupted dividends. Investors will be watching whether the cost program offsets soft crush and biofuel margins, and whether the company can restore cash generation while maintaining its share repurchase and dividend commitments.

02—Key points

Key Highlights

FY2024 GAAP EPS of $3.65 (down 43%) and adjusted EPS of $4.74 (down 32%); net earnings attributable to ADM of $1.8 billion versus $3.5 billion in 2023.
Total segment operating profit of $4.2 billion, down 28%; Ag Services & Oilseeds fell 40% to $2.4 billion, with Refined Products and Other down 58%.
Q4 2024 adjusted EPS of $1.14 (down 16%) while GAAP EPS rose 10% to $1.17, aided by lower share count and specified-item gains.
Operating cash flow fell to $2.8 billion from $4.5 billion, and cash flow before working capital declined to $3.3 billion from $4.7 billion.
2025 adjusted EPS guidance of $4.00 to $4.75, reflecting weaker market fundamentals and biofuel and trade policy uncertainty.
Announced targeted cost savings of $500 to $750 million over 3 to 5 years, including roughly 600 to 700 targeted role reductions globally in 2025.
Quarterly dividend raised 2% to $0.51 per share, the company's 93rd consecutive year of uninterrupted dividends.

03—Questions

Frequently Asked Questions

Why did ADM's earnings decline so significantly in 2024?
The decline was driven mainly by the Ag Services & Oilseeds segment, which fell 40%. Crush margins normalized as South American supply became ample, and Refined Products and Other margins fell sharply because of biofuel policy uncertainty, increased renewable diesel pre-treatment capacity, and higher imports of used cooking oil. Nutrition also fell 10%, mainly due to unplanned downtime at Decatur East and lower texturants pricing.
Why is GAAP EPS up in Q4 while adjusted EPS is down?
Q4 GAAP EPS of $1.17 benefited from a much lower diluted share count (484 million versus 531 million a year earlier) following share repurchases, and from items excluded from adjusted results such as impairment reversals and contingency reserve adjustments. Adjusted EPS of $1.14 fell 16% because underlying segment operating profit declined 16%, so the share count benefit did not offset weaker operations.
What does the 2025 guidance imply for investors?
Guidance for adjusted EPS of $4.00 to $4.75 implies further earnings pressure, roughly flat to down from the 2024 adjusted figure of $4.74 at the top of the range. ADM notes it cannot reasonably forecast GAAP EPS because of uncertain impairment, restructuring, and regulatory charges, so GAAP results could differ materially from the adjusted range.
How significant is the $500 to $750 million cost savings program?
The program equals roughly 3% to 5% of 2024 revenue-based cost structure over several years, and represents a meaningful but gradual lever. Management expects most savings on an annual run-rate basis through manufacturing cost improvements, lower purchased materials and services spend, and workforce reductions. Investors should watch execution and how much of the savings is reinvested or offset by inflation and weaker market conditions.
Are the dividend and capital returns secure despite weaker earnings?
The dividend was raised 2% to $0.51 per share, signaling management's confidence and commitment to shareholder returns. However, 2024 operating cash flow of $2.8 billion, combined with $985 million in dividends and $2.3 billion in share repurchases, exceeded free cash flow after $1.6 billion of capital expenditures, and the company drew on short-term lines of credit. Continued payouts at this level depend on a cash flow recovery in 2025.

04—Continue

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