ADM’s Stock Fell 2% Due to Weaker Performance in 2Q16



Archer Daniels Midland fell after its 2Q16 results

Archer Daniels Midland (ADM) reported its 2Q16 results on August 2. The stock didn’t react well to the results. It fell 2% on the same day. It closed at $43.45—compared to the previous day’s closing price of $44.24. As we discussed in the previous parts of the series, the company’s earnings and revenue missed estimates for the quarter with declining growth year-over-year. However, the stock rose 1% after the company announced a dividend and closed at $43.93 on August 3.

Article continues below advertisement

The stock also fell 3% after the company reported disappointing first-quarter results on May 3. Revenue and earnings also missed estimates in the first quarter. The stock closed 1% higher on April 19 when it announced investment for National Foodworks Services’ new headquarters. On June 1, the stock closed 0.14% higher after the company announced the completion of the acquisition of a Morocco-based corn wet mill. Read Why Did ADM Acquire a Moroccan Sweetener Facility? to learn more.

It lost 30% in fiscal 2015 due to negative earnings growth and weaker sales in most of the company’s operating segments. So far in 2016, Archer Daniels Midland has gained 23% as of August 3. It outperformed the Market represented by the S&P 500 Index by 15% as of August 3. It closed at $43.93 on August 3.

Peers’ stock performance

Along with its four segments, Archer Daniels procures, transports, stores, processes, and merchandises agricultural commodities and products. The stock has gained 12% since its last quarter results.

So far in 2016, Archer Daniels Midland’s peer Ingredion (INGR) has gained 44%, while Bunge (BG) has lost 4%, respectively. They closed at $133.66 and $64.46, respectively, on August 3. The PowerShares High Yield Equity Dividend (PEY) and the SPDR S&P Dividend ETF (SDY) invest 1.4% and 1.3% of their portfolio in Archer Daniels Midland.


More From Market Realist