ADM Q2 profit drops 55%, marking lowest second-quarter earnings in five years

USA – Archer Daniels Midland Co. (ADM) has reported a steep 55% drop in second-quarter net earnings, underscoring the ongoing pressure from global trade policy uncertainty, fluctuating biofuel regulations, and a weaker commodity price environment.

For the quarter ended June 30, 2025, the Chicago-based agribusiness giant posted net income of US$219 million, or 45¢ per share, compared with US$486 million, or 98¢ per share, in the same period a year earlier.

This marks ADM’s lowest second-quarter profit in five years.

Earnings before income taxes fell to US$279 million, down from US$596 million in the previous year’s second quarter, while revenues slipped 5% to US$21.17 billion from US$22.25 billion.

The latest quarter also included US$137 million in asset impairment, exit and restructuring costs, substantially higher than the US$7 million reported in the prior year.

These results have prompted ADM to tighten its fiscal 2025 adjusted earnings-per-share guidance to approximately US$4, down from a previous range of US$4 to US$4.75.

Speaking during the company’s August 5 earnings call, ADM president and chief executive officer Juan Luciano said the team remained focused on managing what is within its control amid a volatile external environment.

 “The team’s focus has been on managing what we can control in a dynamic environment, and we continue to drive positive momentum in those areas in the second quarter,” Luciano said.

Despite the weak quarterly performance, Luciano pointed to the potential for improved conditions in the second half of the year.

“As we look to the back half of 2025 from an external perspective, we anticipate increasing biofuels and trade policy clarity that accelerate our ability to create positive economic opportunities and drive additional investments such as these throughout our business and the agriculture sector,” he said.

Luciano added that ADM is well positioned to play a leadership role in advancing public policy initiatives that support the agricultural economy.

“As public policy increasingly supports the agricultural sector, ADM is poised to play a pivotal role in driving that progress. In the US, for instance, as policies are finalized to accelerate the adoption of renewable fuels, ADM is ready to lead, advancing the innovative solutions that open new, high-value markets for American farmers and strengthen the broader bio economy.”

Ag Services and Oilseeds under pressure

ADM’s largest operating segment, Ag Services and Oilseeds (AS&O), recorded a 17% decline in operating profit to US$379 million, down from US$459 million in the year-ago quarter. The segment was impacted by reduced volumes and margins linked to trade policy headwinds, lower commodity prices, and slower farmer selling.

Crushing was particularly weak, with operating profit falling 75% to US$33 million from US$132 million, reflecting lower global soybean and canola crush margins. Ag Services dropped to US$113 million from US$122 million, while Refined Products & Other grew 14% to US$156 million from US$137 million.

However, the company noted that biodiesel margins remained under pressure due to policy uncertainty and weaker vegetable oil demand, which also impacted refining margins.

Carbohydrate Solutions faces mixed signals

The Carbohydrate Solutions segment posted an operating profit of $337 million, down 5.7% from $357 million a year earlier.

Within the segment, Starches and Sweeteners fell 6% to US$304 million, while Vantage Corn Processors declined slightly to US$33 million from US$34 million.

Global wheat milling margins and volumes were higher, supported by stronger volume growth with key customers. ADM also saw improved profitability in North American corn wet milling, where stronger liquid sweetener margins helped offset weaker starch volumes.

In the Nutrition segment, ADM recorded a 4.6% increase in operating profit, reaching US$114 million compared with US$109 million in the second quarter last year.

Human Nutrition, however, saw an 11% drop to US$92 million, while Animal Nutrition grew sharply to US$22 million from US$6 million a year ago, reflecting strategic realignment and improved execution.

Luciano noted that portfolio management and asset optimization remained a core priority. “We made decisions to cease operations at certain facilities that no longer align with our long-term goals, including several AS&O origination sites globally, a port transload facility in Florida, an aquaculture plant in Ecuador, the pet and animal nutrition plant in Brazil and two assets no longer strategic to the Specialty Ingredients business,” he said.

These moves are aimed at improving operational efficiency and concentrating investment on high-return areas. A major milestone in this regard was the recommissioning of the Decatur East facility, which is ramping up production and is expected to reduce costs within ADM’s Specialty Ingredients business during the remainder of the year.

ADM reaffirmed its long-term target of US$500 million to US$750 million in aggregate cost savings over the next three to five years. This effort, the company said, will be driven by asset optimization, disciplined capital allocation, and operational excellence.

Chief financial officer Monish Patolawala, who joined ADM in July 2024, reported progress on strengthening internal controls and compliance systems.

“This quarter, we announced that we have successfully remediated the material weakness in internal controls for segment disclosures related to reporting, pricing and measurements,” he said.

Patolawala added that the company continues to focus on simplifying its portfolio and reducing costs while enhancing its operational footprint. “We have also aggressively acted on opportunities to improve operational performance and lower costs. And we are seeing through these actions that our assets are running better, and we are benefiting from the restored and ramping operations at our Decatur East plant,” he said.

In the six-month period ended June 30, ADM companywide had net earnings of US$514 million, or US$1.06 per share, down 58% from US$1.22 billion, or US$2.41 per share, in the same time of the previous year. Revenues for the six months totaled US$41.34 billion, down 6.3% from US$44.1 billion. 

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