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Highlights:
Archer-Daniels-Midland (ADM) revises its 2024 adjusted earnings per share forecast, lowering it to a range of $4.50 to $5.
The company will amend its previous financial statements following the discovery of additional accounting irregularities, leading to the restatement of several years' worth of data.
A series of internal investigations, including the departure of the CFO, revealed errors related to intersegment sales across multiple divisions.
Archer-Daniels-Midland (NYSE:ADM), a leading global grains merchant, saw its shares fall by 7% in premarket trading on Tuesday following a revision to its 2024 adjusted earnings per share forecast. The company now expects adjusted earnings for the year to fall between $4.50 and $5.00, a significant reduction from the previous range of $5.25 to $6.25.
This downward revision comes as ADM revealed it would amend its financial statements for several past periods due to the identification of additional accounting irregularities. The restatement stems from errors involving intersegment sales, particularly within its Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition segments. These newly identified discrepancies will result in amendments to ADM’s fiscal year 2023 Form 10-K filing and its financial reports for the first and second quarters of 2024.
This announcement marks the continuation of ADM's ongoing efforts to address accounting issues that began earlier this year. In March, the company had already corrected six years of financial data after discovering that certain intercompany sales were improperly recorded. These issues have led to several government investigations and prompted the departure of the company's Chief Financial Officer, Vikram Luthar.
Despite these challenges, ADM has stated that the newly identified errors are not expected to have a material impact on the company’s financial position. The company is working diligently to complete the necessary restatements as quickly as possible.
For the third quarter of 2024, ADM reported adjusted net income of $1.09 per share, falling short of the average analyst estimate of $1.25 per share, according to data from LSEG. The financial restatements and profit revision underscore the importance of transparency and accurate reporting in maintaining stakeholder trust during periods of operational adjustment.
