Bitcoin price today: hovers around $115k amid rate cut bets, but caution remains
Introduction & Market Context
Archer-Daniels-Midland Company (NYSE:ADM) held its second quarter 2025 earnings conference call on August 5, 2025, revealing continued pressure across most business segments while highlighting its strategic initiatives to navigate the challenging environment. The agricultural commodities giant reported a 10% year-over-year decline in both adjusted earnings per share and total segment operating profit, prompting management to tighten its full-year outlook.
ADM’s stock was down slightly in premarket trading following the presentation, with shares changing hands at $54.25, representing a 0.2% decline from the previous close of $54.36. The stock has rebounded significantly from its 52-week low of $40.98 but remains well below its 52-week high of $62.61.
Quarterly Performance Highlights
ADM reported second-quarter adjusted earnings per share of $0.93, down 10% compared to the same period last year. Total (EPA:TTEF) segment operating profit also declined by 10% to $830 million. For the first half of 2025, adjusted EPS reached $1.63, representing a steeper 35% drop from the prior year period, while total segment operating profit fell 26% to $1.6 billion.
As shown in the following financial highlights:
The company’s trailing four-quarter adjusted return on invested capital (ROIC) stood at 6.9%, a decrease attributed to lower total segment operating profit. This figure falls below the company’s annual weighted average cost of capital (WACC) of 8.3%, indicating challenges in creating economic value in the current environment.
Cash flows from operations before working capital amounted to $1.2 billion for the first half of 2025, down $459 million from the same period in 2024, primarily due to lower total segment operating profit.
Segment Analysis
The Ag Services & Oilseeds segment, ADM’s largest business unit, experienced a 17% decline in operating profit compared to Q2 2024. Within this segment, Ag Services operating profit declined 7%, Crushing saw a significant 75% drop, while Refined Products and Other (RPO) delivered a 14% increase.
The segment breakdown illustrates these performance differences:
The Carbohydrate Solutions segment reported a 6% decrease in operating profit compared to the second quarter of 2024. This decline was primarily driven by lower international volumes and margins in the Starches & Sweeteners business, while the Vantage Corn Processors business remained largely in line with the previous year.
In contrast to the other segments, Nutrition delivered approximately 5% growth in both revenue and operating profits compared to Q2 2024. This positive performance was driven by improvements in the Animal Nutrition business, which saw increased operating profit despite steady revenue, reflecting improved margins and ongoing turnaround actions.
Strategic Initiatives
ADM emphasized its balanced "self-help" strategy focused on four key pillars: execution and cost focus, simplification, targeted organic growth investment, and capital discipline. The company highlighted several achievements during the quarter, including targeted network optimization in South America and North America Nutrition operations, record second-quarter uptime results across its global network, and the recommissioning of its Decatur East facility.
The company’s strategic initiatives are outlined in the following slide:
Management reported progress on its cost savings initiatives, stating they are on track to deliver the targeted $200-300 million in cost savings for the year. These efforts are part of a broader strategy to navigate the challenging market environment while positioning the company for future growth.
Cash Flow and Capital Allocation
ADM demonstrated improved working capital management in the first half of 2025, reducing inventory by $2.2 billion. The company maintained a leverage ratio of 2.1x and reported capital expenditures of $596 million for the first half of the year.
The cash flow highlights are illustrated in the following chart:
The company returned $495 million to shareholders through dividends during the first half of 2025, announcing its 374th consecutive quarterly dividend. Capital expenditures for the full year 2025 are now expected to range between $1.3 billion and $1.5 billion, reflecting the company’s disciplined approach to capital allocation.
Forward Outlook
ADM tightened its full-year 2025 adjusted earnings per share outlook to approximately $4.00, down from the previous guidance range of $4.00-$4.75 mentioned in the first quarter. This revision reflects the company’s first-half performance coupled with expectations for a weaker than anticipated third quarter, partially offset by improved projections for the fourth quarter.
The company’s outlook is summarized in the following slide:
By segment, ADM expects year-over-year declines in both Ag Services & Oilseeds and Carbohydrate Solutions operating profits, while the Nutrition segment is projected to deliver growth. Management specifically noted expectations for improving crush and biodiesel margins in the fourth quarter of 2025, which should help offset some of the weakness experienced earlier in the year.
Despite the near-term challenges, ADM remains focused on its self-help agenda, which management believes positions the company for continued success through balanced cost management, strategic simplification, targeted investments, and capital discipline in an evolving global agricultural market.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.