Archer Daniels Midland Q1 Earnings Call Highlights

Key Points

• ADM raised 2026 adjusted EPS guidance to $4.15–$4.70 (from $3.60–$4.25) after reporting Q1 adjusted EPS of $0.71 and total segment operating profit of $764 million, citing a more constructive margin environment in crushing and ethanol following EPA RVO clarity.
• First-quarter results included about $275 million of net negative mark-to-market and timing impacts (≈70% in crushing) that produced a crushing operating loss of $79 million, but management expects the majority to reverse in Q2 with the remainder reversing later in 2026.
• Segment performance improved: Carbohydrate Solutions operating profit rose to $356 million (up 48% QoQ) driven by stronger ethanol margins supported by rising RINs and export demand, while Nutrition operating profit increased to $135 million with flavor momentum and the Decatur East plant returning to full volume.

Archer Daniels Midland NYSE: ADM reported first-quarter 2026 adjusted earnings per share of $0.71 and total segment operating profit of $764 million, as management pointed to a more constructive margin environment in crushing and ethanol and raised its full-year outlook.

Chair and CEO Juan Luciano said soybean crush and ethanol margins “strengthened meaningfully” as the market anticipated the finalization of renewable volume obligations (RVOs) for 2026 and 2027, which the EPA published March 27. “Based on our expectation that we will continue to successfully advance our priorities throughout the remainder of the year, combined with the expectation that the constructive margin environment we are in continues, we are raising our earnings guidance range for 2026,” Luciano said.

ADM lifted its 2026 adjusted EPS guidance to a range of $4.15 to $4.70, up from $3.60 to $4.25 previously.

Quarterly results and cash flow

Luciano said trailing fourth-quarter adjusted return on invested capital was 6.4%. The company posted cash flow from operations before working capital changes of $442 million for the quarter.

CFO Monish Patolawala said ADM invested $194 million during the quarter and reiterated full-year 2026 capital expenditures expectations of $1.3 billion to $1.5 billion. ADM distributed $254 million in dividends, which Patolawala noted marked the company’s 377th consecutive quarterly dividend. Net leverage was 2.2x at March 31, which Patolawala said was in line with seasonal expectations and reflected higher commodity prices; the company’s year-end net leverage expectation remains around 2x.

Ag Services and Oilseeds: export strength, mark-to-market headwinds

Patolawala described significant mark-to-market and timing impacts in the quarter. He said first-quarter 2026 results included approximately $275 million of net negative mark-to-market and timing impacts, with roughly 70% attributable to the crushing sub-segment; the remaining balance was split across refined products and other and Ag Services. In the prior-year quarter, he said net negative impacts of about $22 million were mainly related to Ag Services.

Despite those impacts, Ag Services operating profit rose. Patolawala said the Ag Services sub-segment generated operating profit of $200 million, up 26% year over year, driven primarily by higher North American export activity supported by increased trade with China and a strong corn export program. He added that the prior-year period was pressured by certain export duties.

In crushing, ADM posted an operating loss of $79 million, which Patolawala said reflected net negative mark-to-market and timing impacts. He said plant productivity improved versus the prior year, and soybean meal sales were strong due to robust global demand. Refined products and other delivered operating profit of $86 million, down 36% year over year, primarily driven by the same mark-to-market and timing impacts.

In response to an analyst question about renewable diesel and biodiesel activity, Luciano said rising RIN values helped bring capacity back online and pulled soybean oil demand. “We saw RINs going up by $1,” Luciano said, adding that it “created a margin for all these biodiesel plants and renewable diesel plants to come on the stream,” supporting soybean oil demand and crush margins. He pointed to crush rate improvement in North America in March, saying crush rates “jumped 6%” and were “about 10% higher than last year.”

Carbohydrate Solutions: ethanol strength offsets softness elsewhere

Carbohydrate Solutions segment operating profit was $356 million, up 48% from the prior quarter, driven primarily by strengthening ethanol margins, Patolawala said.

Within starches and sweeteners, operating profit was $229 million, up 11% sequentially. Patolawala said the increase was driven by stronger ethanol results in North American corn wet milling plants, partially offset by lower global liquid sweeteners and starches volumes and margins. In the Vantage Corn Processors sub-segment, operating profit was $127 million, a $94 million increase from the prior quarter, benefiting from strengthening ethanol margins and “effective risk management and policy incentives.”

Luciano said ethanol margins were supported by both domestic and export demand, noting export demand was “about 10% year-over-year” and that the industry had drawn down inventory while not producing fully earlier in the year. He also pointed to ethanol’s competitiveness versus gasoline, citing ethanol at about $2 per gallon compared with RBOB gasoline trading above $3.50. Luciano said ADM expects domestic demand around “14.5 billion gallons, give or take,” and exports of about 2.4 billion gallons.

Asked about efforts to address softness in sweeteners and starches, Luciano said ADM has been diversifying the “grind” and pursuing industrial applications, including personal care and fabric softeners. He referenced biosolutions work that shifts products into different end markets, but cautioned that those markets are smaller and take time to develop.

Nutrition: flavor momentum and Decatur East recovery

Nutrition segment revenues were $1.8 billion, down 1% from the prior quarter, Patolawala said. Human Nutrition revenue increased 3% year over year, driven primarily by higher flavor sales and aided by foreign exchange gains. Animal Nutrition revenue decreased 5% year over year, which Patolawala attributed largely to previously disclosed portfolio exits and the formation of the animal feed joint venture with Alltech, partially offset by foreign exchange gains.

Nutrition segment operating profit was $135 million, up 42% from the prior quarter. Human Nutrition operating profit rose to $104 million, up 39% sequentially, driven by higher flavor sales, foreign exchange gains, and continued recovery at the Decatur East plant, Patolawala said. Animal Nutrition operating profit was $31 million, up 55% sequentially, reflecting strategic portfolio actions, cost optimization, foreign exchange gains, and a focus on higher-margin offerings.

On the call, Luciano said the company has brought Decatur East “back” with full volume now available, though he noted customer recovery will take time after an extended absence. “We haven’t recovered our full position yet, and that will probably take a while,” he said.

Updated outlook: mark-to-market reversals, policy assumptions, and cost savings

Patolawala said the guidance increase reflects two main factors: expected continued execution and the expectation that improved margins in crushing and ethanol will persist. He emphasized that first-quarter mark-to-market and timing impacts were tied to rising commodity prices and “signal improving underlying market conditions,” with the majority of the $275 million net negative impact forecast to reverse in the second quarter and the remainder expected to reverse in the second half of 2026. He also cautioned that ADM does not estimate new mark-to-market impacts in guidance.

Other assumptions included expectations that China resumes a normalized buying pattern for North American soybeans and that ethanol margin strength supported by policy incentives continues to more than offset ongoing softness in starches and sweeteners. For Nutrition, Patolawala said expectations for year-over-year growth remain intact, supported by higher flavor sales, continued recovery tied to Decatur, and margin expansion in animal nutrition.

Luciano and Patolawala cited a range of external factors they are monitoring, including consumer trends, energy costs, supply chain dislocations, global trade and tariff dynamics, foreign exchange, and ethanol industry developments. Patolawala also said ADM remains on track to achieve targeted aggregate cost savings of $500 million to $750 million over a 3- to 5-year period that commenced in 2025.

In the question-and-answer session, Luciano said the 45Z credit should be included in segment income, adding that ADM expects an approximately $150 million impact for full-year 2026. He noted the estimate depends on several variables, including plant carbon intensity scores, prevailing wage requirements, sequestration, volumes, and industry pricing response.

Looking to capital allocation, Luciano said ADM will maintain its balanced framework, prioritizing cost and growth projects and continuing to support the dividend. He added that bolt-on M&A remains part of the strategy and said buybacks “could” be possible in the future as cash flows improve, though he did not announce a specific program.

“As we look ahead, we’re increasingly constructive on our outlook for 2026,” Luciano said, pointing to policy clarity and what he described as disciplined execution.

About Archer Daniels Midland NYSE: ADM

Archer Daniels Midland Company (ADM) is a global agricultural processor and food-ingredient provider that sources, transports and processes oilseeds, corn, wheat and other agricultural commodities. The company operates large-scale crushing, refining and processing facilities that produce vegetable oils, protein meals, corn sweeteners, starches, ethanol, animal feeds and a wide range of food and industrial ingredients. ADM also develops specialty ingredients and solutions for human and animal nutrition, food and beverage formulation, and industrial applications such as bio-based materials and renewable fuels.

ADM's business combines commodity origination and merchandising with downstream manufacturing and ingredient formulation.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.