ADM quarterly revenue falls on weak crush margins, publicizes layoffs – Revenue decline attributable to weak oilseed crush margins, biofuel coverage uncertainty
- ADM to chop as much as 700 jobs amid cost-reduction measures
- Revenue decline attributable to weak oilseed crush margins, biofuel coverage uncertainty
- CEO emphasizes want for agility amid commerce and regulatory shifts
CHICAGO, Feb 4 (Reuters) – Grains service provider Archer-Daniels-Midland (ADM.N), posted its lowest fourth-quarter adjusted revenue in six years on Tuesday on weak oilseed crush margins and uncertainty over U.S. biofuel coverage and mentioned it’s chopping prices and slashing as much as 700 jobs to climate the market downturn.
Chicago-based ADM mentioned it aimed to chop prices by $500 million to $750 million over the following three to 5 years by way of job cuts and decrease uncooked supplies and manufacturing prices.
ADM shares have been down 3% at $48.50 at noon on Tuesday.
Reuters had reported final week that the grain dealer would quickly begin shedding workers in a world effort to chop prices, with the majority of cuts anticipated in the US, in accordance with sources.
ADM didn’t present particulars in regards to the cuts, which might signify roughly 1.7% of its world workforce.
Sources instructed Reuters that layoffs are presently beneath method.
ADM’s revenue has eroded amid gradual demand and a world glut of staple crops like corn and soybeans, which it buys, sells, processes and ships world wide. Costs of each crops hit four-year lows in 2024 as world shares of the meals staples ballooned to multiyear highs, pressuring margins.
U.S. import tariffs and attainable commerce retaliation by China and different high patrons of American crops created further headwinds for ADM.
Juan Luciano, CEO instructed analysts on a convention name,
We’ve entered 2025 figuring out that we have to stay agile to handle by way of shifts in each commerce and regulatory coverage world wide, together with the associated impacts on geographic provide and demand,
ADM forecast adjusted earnings within the vary of $4 to $4.75 per share in 2025, the midpoint of which might signify a 3rd straight annual decline in revenue.
The steering didn’t embody potential impacts from a commerce struggle.
Fourth-quarter working revenue in ADM’s agricultural companies and oilseeds division, its largest phase, tumbled 32% from a yr earlier on weak North American oilseed crushing margins and uncertainty round biofuel insurance policies.
The corporate expects the division to publish flat to decrease working revenue this yr, whereas earnings in its carbohydrate options division have been anticipated to contract.
The corporate posted an adjusted revenue of $1.14 per share for the three months ended Dec. 31, down 16% from $1.36 a yr earlier and in contrast with analysts’ common estimate of $1.15 per share, in accordance with information compiled by LSEG.
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ADM quarterly revenue falls on weak crush margins, publicizes layoffs – Revenue decline attributable to weak oilseed crush margins, biofuel coverage uncertainty, supply
