Archer Daniels' Q4 Earnings Beat Consensus as Multiple Segments Navigate Headwinds

Archer Daniels Midland Company (ADM) delivered fourth-quarter 2025 results that exceeded profit expectations but stumbled on the revenue front. The agricultural giant’s adjusted earnings of 87 cents per share topped the Zacks Consensus Estimate of 83 cents, yet this still represented a significant retreat from the $1.14 per share earned in the comparable quarter last year. On a reported basis, earnings landed at 94 cents per share, down from $1.17 in the prior year, signaling underlying pressure across the organization.

The top-line story proved more challenging. Total revenues contracted to $18.6 billion, falling 13.7% year over year and missing the consensus forecast of $22.3 billion. This decline reflected broader weakness across ADM’s operating structure, particularly in its agricultural operations. The gross profit margin compressed to 6.5%, with absolute gross profit dropping 10.7% compared to the year-ago period, though the company managed to trim selling, general and administrative expenses by roughly $50 million.

Segment Breakdown: Where ADM’s Symbol of Strength Fades

The line segment performance reveals the complexity facing ADM. Adjusted operating profit across all segments totaled $821 million, a sharp 22% decline year over year, indicating the breadth of the challenge.

Ag Services & Oilseeds bore the brunt of weakness. This critical line segment saw operating profit plummet 31% to $444 million. Within the Ag Services subsegment, lower soybean export activity from North America and unfavorable mark-to-market dynamics drove the decline. The quarter carried $1 million in net negative mark-to-market impacts versus $50 million in positive marks the prior year—a $51 million swing.

The Crushing subsegment fared even worse, with operating profit cratering 69% year over year. Weaker crush margins across North and South America, despite higher global crush volumes, dominated the results. An additional $20 million in net negative mark-to-market impacts during the quarter compared with neutral impacts last year further pressured profitability. Refined Products operations declined just 2%, but remained hampered by softer food and fuel demand, with uncertainty around U.S. biofuel policy creating additional headwinds. A silver lining emerged from ADM’s Wilmar equity investment, which generated earnings roughly 49% higher than the prior year.

Carbohydrate Solutions segment symbol shifted toward resilience compared to Ag Services. Operating profit registered $299 million, reflecting a 6% year-over-year decline. The Starches & Sweeteners subsegment bore the weakness, with operating profit declining 16% due to depressed global demand pressuring both volumes and pricing. Higher corn costs in the EMEA region added pressure. Additionally, the prior-year quarter benefited from $37 million in insurance proceeds from Decatur facility claims, whereas only $4 million appeared this quarter—creating a $33 million comparison headwind.

Vantage Corn Processors provided a bright spot, with operating profit surging 187% year over year. Firm ethanol margins in October and November, supported by strong export demand that reduced industry inventories, more than offset typical seasonal softness in December.

Nutrition, the smallest segment by revenue, posted $78 million in operating profit, down 11% year over year. The Human Nutrition subsegment experienced a 10% decline, though Flavors benefited from robust North American demand. Specialty Ingredients continued recovering momentum, while Health & Wellness took a step back due to inventory normalization efforts. Animal Nutrition subsegment profit fell 15% due to localized volume weakness and one-time items.

Capital Position and Shareholder Returns

ADM closed the quarter with $1.02 billion in cash and equivalents, against long-term debt of $7.6 billion and shareholders’ equity of $34.7 billion. Full-year 2025 operating cash flow totaled $5.45 billion, allowing the company to pay $987 million in dividends while maintaining financial flexibility.

The company announced a 2% increase to its quarterly dividend, with the board declaring 52 cents per share, up from 51 cents. This marks the 94th consecutive year of uninterrupted dividend payments—a symbol of long-term commitment to shareholders despite near-term challenges.

2026 Outlook and Capital Allocation

Management guided 2026 adjusted EPS to a range of $3.60 to $4.25, reflecting significant uncertainty. The lower end assumes continued lack of clarity on U.S. biofuel policy and flat crush margins, while the upper end incorporates margin expansion, manufacturing efficiency gains, and strengthening customer demand.

By line segment, Ag Services & Oilseeds is expected to show year-over-year profit growth supported by improving global trade flows and various crush margin scenarios. Carbohydrate Solutions operating profit should remain relatively flat, as weakness in starches and sweeteners gets offset by stronger ethanol margins. Nutrition is positioned to deliver organic growth acceleration and operational improvements.

Capital expenditure guidance for 2026 ranges from $1.3 billion to $1.5 billion, reflecting ongoing investment in strategic priorities and operational efficiencies. The company’s Zacks Rank #3 (Hold) rating reflects mixed sentiment, though shares have appreciated 13.2% over the past three months relative to the broader industry advance of 14.8%.

The Takeaway

ADM’s earnings beat masks a more complex reality: multiple segments face structural headwinds, from commodity price pressures to demand softness. While management’s dividend confidence and 2026 guidance suggest confidence in stabilization, investors should closely monitor segment performance and margin trends as the year progresses. The company’s ability to navigate policy uncertainty and rebuild crush margins will determine whether Q4 represents a temporary setback or the beginning of a prolonged downturn.