On Tuesday, ADM posted its strongest third-quarter profit on record on robust demand for grain and oilseeds and tight supplies, and said full-year earnings would exceed previous guidance.
“Global demand remains robust, and our adjusted EPS of $1.86 is a reflection of our team’s expertise in managing dynamic market conditions, as well as the unique benefits of our integrated global value chain and our product portfolio," said Chairman and CEO Juan Luciano.
According to reports, ADM shares touched a six-week high as earnings topped the consensus analyst estimate for a 13th straight quarter.
The company reported net earnings and adjusted earnings of about $1 billion.
ADM's results offered a look into how global agribusinesses have weathered tightening grain stocks, high energy prices and snarled supply chains following Russia's February invasion of Ukraine.
“Today’s ADM is a resilient company, with a broad global footprint and an array of innovative capabilities that are driving performance for customers, consumers and shareholders," noted Luciano.
"And with strong cash flows, we’re advancing productivity initiatives to enhance cost efficiencies and returns; driving innovation efforts to build new capabilities and growth engines across all of our businesses; and continuing to return capital to our shareholders.
"We’re well positioned to end 2022 strong, and carry that momentum into 2023," he concluded.
Third quarter 2022 highlights
(Amounts in millions except per share amounts) | 2022 | 2021 | ||||
Earnings per share (as reported) | $ | 1.83 | $ | 0.93 | ||
Adjusted earnings per share | $ | 1.86 | $ | 0.97 | ||
Segment operating profit | $ | 1,559 | $ | 1,000 | ||
Adjusted segment operating profit (loss) | $ | 1,579 | $ | 1,002 | ||
Ag Services and Oilseeds | 1,075 | 618 | ||||
Carbohydrate Solutions | 309 | 213 | ||||
Nutrition | 177 | 176 | ||||
Ag Services & Oilseeds delivered substantially higher year-over-year results.
- Ag Services results were significantly higher than the third quarter of 2021. The short crops in South America supported U.S. exports, driving improved volumes and margins in North American origination, which had significant negative impacts from Hurricane Ida in the prior year. Better margins in global ocean freight, driven by good execution amid dynamic global trade flows, powered better results in Global Trade. South American origination saw improved volumes and margins driven by increased farmer selling in addition to higher volumes through our export facilities.
- Crushing results were significantly higher, with margins driven by resilient global demand for both meal and oil. Strong rapeseed margins in EMEA, driven by robust oil demand and continued market dislocations, along with positive impacts from an insurance settlement, helped drive improved results. North American soy crush margins continued to benefit from renewable diesel demand. Also, net positive timing effects in the quarter were about $175 million, as compared to the approximately $70 million in the prior-year quarter. Positive results were partially offset by lower crush volumes, including impacts from idled facilities in Ukraine and Paraguay.
- Refined Products and Other results were higher year over year in a strong margin environment for both refined oils and biodiesel. Robust performance in global refined oils was driven by healthy demand and elevated refined oil margins amid supply chain disruptions.
Carbohydrate Solutions results were significantly higher than the prior-year quarter’s.
- The Starches and Sweeteners subsegment, which includes ethanol production from our wet mills, delivered much improved year-over-year results amid steady global demand for sweeteners and starches. Corn co-products — including continued robust demand for corn oil — as well as effective risk management drove higher execution margins in North America. Wheat milling had a strong performance, delivering improved volumes and margins to meet healthy demand for flour. In EMEA, the business delivered solid volumes and margins and managed through a dynamic energy environment to drive stronger results.
- Vantage Corn Processors results were substantially lower. Ethanol margins were pressured by lower domestic demand and elevated corn costs. In addition, the prior year’s results included contributions from the now-sold Peoria facility.
Nutrition delivered revenue growth of 10%, and 16%1 on a constant currency basis; operating profit was similar to the prior-year quarter’s, and 7% higher on a constant currency basis, with continued strong demand offset by some demand fulfillment challenges.
- Human Nutrition results were higher than those of the third quarter of 2021. Strong demand for plant-based proteins, as well as solid performance in texturants, drove continued growth in Specialty Ingredients. Flavors results were impacted by adverse currency translation effects in EMEA, partially offset by continued strong demand growth in the region; demand fulfillment challenges in North America and lower demand in APAC — driven partly by lockdowns in China — also negatively impacted results. Health & Wellness was lower versus the prior year, which included higher income from the Spiber fermentation agreement.
- Animal Nutrition results were down versus the prior-year quarter. Pet results were lower in Latin America on lower volumes, partially offset by strong volumes and margins in North America. Softer animal protein demand affected feed volumes.
