Investors in Archer-Daniels-Midland Co. breathed a sigh of relief as the commodity giant’s delayed annual report did not contain any bombshell financial revelations that had been feared. The company revised its intersegment sales for the last three years following an internal probe into its financial reporting, revealing a $137 million impairment charge related to its animal nutrition unit. Despite these adjustments, overall earnings were not impacted, leading to a rise in the company’s stock price by as much as 5.6%.
The internal investigation into ADM’s financial reporting led to the disclosure of adjustments and charges that provided investors with a clearer picture of the scandal that had initially wiped out over $7 billion in the company’s value. While some analysts referred to the changes as relatively minor, ADM confirmed that certain employees have received subpoenas from the Department of Justice. The company’s expansion into the nutrition business has faced challenges in meeting profit expectations, especially due to weakening demand, raising concerns about its growth strategy.
ADM’s fourth-quarter earnings and 2024 guidance, including adjusted earnings per share in the range of $5.25 to $6.25, were reported in a separate filing. Despite the challenges faced by the company, the announcement of a $2 billion share buyback and the provided guidance helped drive shares higher. While the investigation into the company’s financial reporting continues, ADM has stated that it is taking steps to remediate the material weakness identified in its internal controls.
