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How Has Archer Daniels Midland Performed in 3Q16?

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Price movement

Archer Daniels Midland (ADM) has a market cap of $26.7 billion. It rose 7.3% to close at $46.75 per share on November 1, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 9.9%, 9.0%, and 30.5%, respectively, on the same day. ADM is trading 9.6% above its 20-day moving average, 9.5% above its 50-day moving average, and 17.9% above its 200-day moving average.

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Related ETF and peers

The Consumer Staples Select Sector SPDR ETF (XLP) invests 1.4% of its holdings in ADM. The ETF tracks a market-cap-weighted index of consumer staples stocks drawn from the S&P 500. The YTD price movement of XLP was 5.9% on November 1. The market caps of ADM’s competitors are as follows:

  • Bunge (BG) — $8.7 billion
  • Ingredion (INGR) — $9.6 billion

Performance of Archer Daniels Midland in 3Q16

Archer Daniels Midland reported 3Q16 revenue of $15.8 billion, a fall of 4.8% from the revenue of $16.6 billion in 3Q15. Whereas the operating profit of the Oilseed Processing segment fell 57.0%, the operating profit of Agricultural Services Processing, Corn Processing, and WILD Flavors and Specialty Ingredients Processing rose 29.5%, 61.8%, and 4.3%, respectively, between 3Q15 and 3Q16. The company’s gross profit margin expanded by 40 basis points.

Its net income and EPS (earnings per share) rose to $341.0 million and $0.58, respectively, in 3Q16, compared with $252.0 million and $0.41 in 3Q15. The earnings include credit related to LIFO (last-in, first-out) inventory, charges of asset impairment, restructuring and settlements, and other charges. It reported adjusted EPS of $0.59 in 3Q16, a fall of 1.7% from 3Q15.

ADM’s cash and cash equivalents and operating working capital fell 2.6% and 7.4%, respectively, between 3Q15 and 3Q16. Its debt-to-equity ratio rose to 0.57x in 3Q16, compared with 0.55x in 3Q15. Next, we’ll look at Herbalife (HLF).

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