ADM shares fall after ADM lowers its profit forecast for 2025 due to biofuel and trade uncertainties
Grains trader Archer-Daniels-Midland cut its 2025 profit forecast for a third straight quarter on Tuesday as U.S. biofuel policy uncertainty and global trade disruptions pressured oilseed crush margins.
The shares were down about 1 percent at midday after falling nearly 11 percent in premarket trading.
ADM's earnings and those of its peers in the agribusiness sector have been eroded over recent quarters as a result of abundant global crop supplies, and a volatile commodities market that has weakened margins.
The U.S. President Donald Trump’s tariff threats and shifting of deadlines for duties has created further difficulty for global grains merchants, like ADM. This includes halting Chinese purchase of U.S. soya beans and other farm products that have driven crop prices to multiyear lows.
Deferring U.S. policy decisions on biofuels, especially regarding requirements for renewable fuel blends, has slowed the use of feedstocks such as soybean oil produced by ADM processing facilities.
ADM SEES EARNINGS REBOUNDING IN 2026
ADM's largest division, the agricultural services and oilseeds segment, saw its profit fall 21% to $379.9 million in the third quarter. A 93% drop in crushing profits was more than offset by gains in corn and soybean exports.
ADM forecast adjusted earnings between $3.25 and $3.50 per share in 2025. This is down from its previous forecast around $4.00 per share, and below analysts' estimates of $3.79. The earnings, if realized, would be the lowest for ADM since 2019.
The company expects a return to profitability in 2026.
The CEO Juan Luciano stated that "the recent progress in the deal with China, coupled with our expectations of gaining clarity on U.S. policy regarding biofuels within the next few weeks or months will be an encouraging setup for the coming year."
Last week, Trump and Chinese President Xi Jinping agreed to reduce certain tariffs. China also promised to resume U.S. soya bean purchases after shunning it for months.
ADM's adjusted profit per share was 92 cents for the three-month period ended September 30. This is a record low for the quarter, but still exceeds the average analyst estimate of 85 cents. These data were compiled by LSEG. Reporting by Karl Plume, Chicago; Katha Kalia, Bengaluru. Vijay Kishore and Mark Potter edited the article.
(source: Reuters)
