Grains merchant ADM dives 10% on fresh accounting errors, profit forecast cut
ADM to amend financial statements after fresh accounting errors
Shares drop 10%, wiping out over $2.3 billion in market value
CEO Juan Luciano under pressure after previous corrections in March
Adds details, background, adds analyst quote, adds no comment from SEC, updates shares
By Karl Plume and Mrinalika Roy
CHICAGO, Nov 5 (Reuters) -Archer-Daniels-Midland ADM.N shares fell as much as 10% onTuesday after the global grains merchant cut its adjusted annual profit forecast and said it would amend its previous financial statements after finding fresh accounting irregularities.
The drop wiped away more than $2.3 billion of ADM's market value as shares dove to the lowest since January 2021.
The accounting woes are likely to heap more pressure on ADM's leadership team headed by CEO Juan Luciano after the company was forced to correct six years of financial data in March. Aninternal investigation found sales between ADM businessunits were not recorded properly.
ADM saidit will amend its fiscal year 2023 Form 10-K and statements for the first and second quarter of this year followingdiscussions with the U.S. Securities and Exchange Commission, but said it does not expect any material impact on the company on a consolidated basis.
A spokesperson for the SEC declined to comment.
The latest accounting errors have rattled investor confidence in the 122-year-old agribusiness, which has seen profits decline and margins erode as prices for staple crops like corn and soybeans have slid to near four-year lows.
Management "needs to better communicate growth, margin profiles (and) drivers of each segment on a go-forward basis to better serve the investment community," Jefferies said in a research note.
ADM's accountingirregularities sparked several government investigations and led to the departure of CFO Vikram Luthar in September.
"Investors will undoubtedly be disappointed that this accounting overhang has returned," CFRA analyst Arun Sundaram said, adding that they would also question whether ADM will achieve its 2025 financial targets that were set three years ago.
The company postponed its earnings call, which was scheduled for Tuesday, and now expects to hold a webcast after it has filed the amended statements.
The restated filings, which ADM said would be released as soon as "reasonably practicable",will include some newly identified errors concerning additional intersegment sales for all three of its main segments.
ADM cut its 2024 adjusted earnings forecast to $4.50 to $5 per share, from $5.25 to $6.25 it had estimated earlier, due to government policy uncertainty, slow market demand and "internal operational challenges."
The company reported adjusted profit per share of $1.09 for the third quarter ended Sept. 30 in a preliminary filing that the company said was subject to change, compared with the average analyst estimate of $1.25, according to data compiled by LSEG.
ADM's operating profit from its AgServices and Oilseeds segment, its largest by revenue, slumped 43% from a year earlier.
The company also paid $96 million in settlement claims in the quarter.
Reporting by Karl Plume in Chicago and Mrinalika Roy in Bengaluru, additional reporting by Sourasis Bose in Bengaluru; Editing by Sriraj Kalluvila, Shinjini Ganguli and Sharon Singleton
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
