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Archer Daniels Midland Announces New Expansion Plan

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Price movement

Archer Daniels Midland (ADM) has a market cap of $26.2 billion and fell 0.65% to close at $44.46 per share on January 10, 2017. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -3.8%, -3.3%, and -2.6%, respectively, on the same day.

ADM is now trading 2.9% below its 20-day moving average, 1.0% below its 50-day moving average, and 5.9% above its 200-day moving average.

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Related ETF and peers

The Consumer Staples Select Sector SPDR Fund (XLP) invests 1.4% of its holdings in ADM. The YTD price movement of XLP was -0.52% on January 10.

The market caps of ADM’s competitors are as follows:

  • Bunge (BG): $10.0 billion
  • Ingredion (INGR): $9.0 billion

Latest news on ADM

In a press release on January 10, 2017, ADM reported: “Archer Daniels Midland Company (ADM) announced today that it has signed an agreement to acquire Crosswind Industries…a Kansas-based producer of dry-expanded, dual-texture, semi-dry, and semi-moist treat products for pets.”

This acquisition will expand the product portfolio for its customers.

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Performance in 3Q16

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

The company’s net income and EPS (earnings per share) rose to $341 million and $0.58, respectively, in 3Q16, as compared with $252 million and $0.41 in 3Q15. These earnings include credit related to LIFO (last in, first out) inventory, charges of asset impairment, restructuring and settlements, and other charges. The company reported adjusted EPS of $0.59 in 3Q16, a fall of 1.7% from 3Q15.

Archer Daniels Midland’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, as compared to 0.55x in 3Q15.

Now let’s discuss Coty (COTY).

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