ADM Q2 2024 Financial Results Show 47% Drop in Pre-Tax Earnings

Second Quarter Performance Overview

In the second quarter of 2024, earnings before taxes dropped sharply by 47%, reaching $596 million, compared to the previous year. The decrease was primarily attributed to lower pricing and execution margins, coupled with higher unallocated corporate costs. Adjusted segment operating profit also fell by 37% to $1,021 million during the same period, with adjusted earnings per share declining to $1.03. The reduction in earnings per share, down by $1.03 from the previous year, was largely driven by "lower crush and origination margins," though a "volume improvement" contributed a $0.19 per share increase. Higher operational costs, including "unplanned downtime at Decatur East," accounted for a $0.07 per share increase in costs, while share repurchases provided a $0.10 per share benefit. The quarter also saw a negative impact of approximately $0.02 per share from "mark-to-market timing in AS&O."

First Half 2024 Financial Results

For the first half of 2024, earnings before taxes amounted to $1,481 million, marking a 41% decrease from the prior year. This decline was driven by similar factors as those affecting the second quarter—namely, lower pricing and execution margins, and increased corporate costs. Adjusted segment operating profit for the first half stood at $2,338 million, reflecting a 30% decrease year-over-year. Adjusted earnings per share for the first half were reported at $2.49, down by $2.02 per share compared to the previous year. This was primarily due to the negative impact of "lower crush and origination margins" and a $0.40 per share decrease from lower mark-to-market timing impacts. However, improved input and manufacturing costs, largely due to lower energy costs, contributed a modest $0.08 per share increase. Despite these gains, unplanned downtime at Decatur East resulted in a $0.10 per share loss. Volume improvements, mainly from higher processed volumes in AS&O, led to a $0.37 per share increase. Additionally, higher equity earnings added $0.06 per share, though these gains were partially offset by a $0.18 per share decrease due to higher IT costs and legal fees. Share repurchases provided a $0.21 per share benefit for the first half of 2024.

Highlights:

• Earnings before taxes dropped by 47% to $596 million in Q2 2024.
• Adjusted segment operating profit for Q2 2024 fell by 37% to $1,021 million.
• Adjusted earnings per share for Q2 2024 decreased to $1.03.
• Earnings before taxes for H1 2024 decreased by 41% to $1,481 million.
• Adjusted segment operating profit for H1 2024 was $2,338 million, down by 30%.
• Adjusted earnings per share for H1 2024 were $2.49, reflecting a significant decline from the previous year.
• Key challenges included lower pricing and execution margins, higher corporate costs, and unplanned operational downtime.