uploads///Archer Danielss Earnings per Share versus Consensus Estimates

Will Archer Daniels Miss Consensus Estimates this Quarter?


Oct. 28 2015, Published 7:03 a.m. ET

Reported EPS in the previous quarters

Archer Daniels Midland (ADM) reported $0.6 as EPS (earnings per share) in 2Q15. It missed the analyst estimates by 8%. However, the company showed better EPS, at $0.77, in the first quarter of 2015, beating estimates by 8%. The EPS consensus estimate for the third quarter is $0.73. We’ll have to wait and find out if Archer Daniels will beat the estimates this quarter. The analysts that follow this company are expecting it to grow earnings at an average annual rate of 5.8% over the next five years. This year, analysts are forecasting a fall in earnings of -3.7% over last year. Analysts expect earnings growth next year of 8.5% over this year’s forecast earnings.

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Management overview of 2Q15

The Company’s Chief Executive Officer, Juan Luciano, stated, “Our second-quarter results demonstrate the strength and value of our geographic and business portfolio diversity. In Corn, domestic and export demand for ethanol was robust, but record industry production limited margins. It was partially offset by strong results from our corn sweeteners and starches business. In Oilseeds, good meal demand supported strong North American soybean crushing results. And South American origination and export volumes were up, leading to good throughput at our expanded origination and port network. These, combined with the flexibility of our global crush plants, helped the Oilseeds team deliver another strong performance. The WFSI team had an excellent quarter and continued to make great progress toward achieving their targeted cost and revenue synergies.”

The management also mentioned that the Agriculture Services segment’s earnings were impacted by lower margins and volumes of North American exports, as they were less competitive globally, and by a sharp upward move in commodity prices at the end of the quarter. But, within the Agricultural Services segment, the milling business had record second-quarter results.

Archer Daniels’s rivals in the industry include Hormel Foods (HRL), Flowers Foods (FLO), and Kraft Heinz (KHC). They reported an EPS of $0.54, $0.24, and $0.17 in their last reported quarter, respectively. The iShares S&P Mid-Cap 400 Value Index (IJJ) and PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invest 0.65% and 1.4% of their portfolios, respectively, in the Flower Foods stock.


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