Agricultural commodities and products processor Archer Daniels Midland Co. (ADM) reported Tuesday a 2% year-over-year decline in profit for the second quarter as higher sales volumes were more than offset by lower selling prices.
Earnings per share for the quarter decreased 2%, but swept past analysts' expectations. Quarterly net sales declined 5%, and missed analysts' expectations.
Archer Daniels is one of the largest agricultural processors in the world, operating processing and manufacturing facilities across the U.S. and worldwide. Serving as a vital link between farmers and consumers, the company takes crops and processes them to make food ingredients, animal feed ingredients, renewable fuels and naturally derived alternatives to industrial chemicals.
In a statement, chairman and chief executive officer, Patricia Woertz said, "While our earnings, in total, were comparable to last year's strong second quarter, the market conditions and the mix of earnings were markedly different. This, once again, demonstrates the ability of the ADM team to utilize the geographic scope and diversity of our asset base to create value for our stockholders."
Second Quarter Results
The Decatur, Illinois-based company posted net earnings of $567 million or $0.88 per share for the second quarter, down 2% from $578 million or $0.90 per share in the prior-year quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share for the second quarter. Analysts' estimates typically exclude special items. Archer Daniels' net sales for the quarter declined 5% to $15.91 billion from $16.67 billion in the same quarter last year, and missed seven Wall Street analysts' consensus estimate of $16.54 billion.
The company primarily attributed the decline in sales during the quarter to lower average selling prices due to decreases in underlying commodity costs, which was partially offset by higher sales volumes and favorable foreign exchange translation impacts.
Among Archer Daniels' peers, Westchester, Illinois-based Corn Products International, Inc. (CPO) reported earlier in the day a 21% year-over-year increase in profit for the fourth quarter earnings, helped by favorable volumes, margins and foreign currencies. Net income rose 21% to $56.3 million or $0.74 per share from $46.4 million or $0.61 per share last year. Quarterly net sales increased 7% to $958.6 million from $900 million in the same period last year.
Another peer, White Plains, New York-based Bunge Ltd. (BG) is scheduled to report financial results for the fourth quarter on February 4, 2010. Analysts expect the company to report earnings of $0.83 per share for the fourth quarter, on revenues of $10.77 billion.
Segmental Details
Oilseeds processing net sales and other operating income for the second quarter declined to $4.88 billion from $5.30 billion in the year-ago quarter. The segment reported operating profit of $352 million, up from $319 million in the prior-year quarter, due to higher volumes and improved margins.
Net sales and other operating income for corn processing totaled $2.03 billion, higher than the prior-year quarter's $1.85 billion. Operating profit for the segment sharply surged to $290 million from $29 million a year ago, boosted by lower net corn costs and improved bioproducts results.
Agricultural services posted net sales and other operating income of $7.64 billion, down from $8.14 billion in the year-ago quarter. The segment's operating profit totaled $150 million, sharply down from $462 million in the same quarter last year, reflecting lower merchandising results.
The company's net sales and other operating income from other operations was $1.36 billion, edging down from $1.38 billion a year ago. Operating profit was $178 million in the quarter, soaring from $5 million in the same quarter of last year, due principally to improved results from cocoa and milling and the absence of last year's Gruma and captive insurance losses.
Other Metrics Total segment operating profit for the second quarter increased 19% to $970 million from $815 million in the prior-year quarter. Gross profit for the quarter totaled $1.05 billion, down from $1.21 billion in the year-ago quarter.
Archer Daniels' selling, general and administrative expenses were recorded at $358 million, higher than $337 million in the prior-year quarter.
The company ended the second quarter with cash and cash equivalents of $1.32 billion, compared to $2.25 billion in the year-ago quarter.
Half-Yearly Highlights
For the first six months, Archer Daniels reported net earnings of $1.06 billion or $1.65 per share, 35% lower than $1.62 billion or $2.52 per share in the prior-year period.
Archer Daniels' net sales for the year-to-date period declined 18% to $30.83 billion from $37.83 billion reported in the same quarter last year.
Stock Quote
ADM closed Monday's regular trading session at $30.16, up $0.09 on a volume of 5.88 million shares, higher than the three-month average volume of 4.74 million shares. In the past 52-week period, the stock has been trading in a range of $23.13 to $33.00.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.