We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Archer Daniels (ADM) Banks On Solid Nutrition Unit, High Demand
Read MoreHide Full Article
Archer Daniels Midland Company (ADM - Free Report) looks well-positioned on the back of solid demand, improved productivity and product innovations. Persistent growth in the Nutrition segment bodes well.
This led to the robust earnings surprise trend, which continued in second-quarter 2022. The top and bottom lines beat the Zacks Consensus Estimate for the seventh straight quarter. Consequently, the Zacks Rank #2 (Buy) stock has gained 45.5% in the past year compared with the industry’s 25.2% growth.
Adjusted earnings of $2.15 per share surged 62% from $1.33 in the year-ago quarter. Revenues advanced 19% year over year to $27,284 million, driven by solid sales across the majority of segments. Adjusted segmental operating profit of $1,849 million was up 59.4% from the year-ago quarter. This marked the 11th straight quarter of adjusted operating profit growth.
Image Source: Zacks Investment Research
Speaking of its Nutrition unit, revenues in the segment rose 15.6% year over year. The segment’s adjusted operating profit grew 19% year over year, owing to significant gains in the Human and Animal Nutrition units.
The Human Nutrition unit gained from strength across its diverse product portfolio. Continued top-line growth in Flavors, particularly in North America, EMEA and South America, bodes well despite rising costs. Strength in alternative proteins led to strong soy protein volumes and margins. This, along with gains from the Sojaprotein buyout and healthy demand for texturants, aided the Specialty Ingredients category.
The Health & Wellness unit also witnessed robust quarterly improvement, driven by growth in probiotics, gains from its Deerland Probiotics buyout and solid fiber demand.
The animal nutrition unit grew significantly year over year, driven by robust volumes and margins in amino acids. Backed by strength across both Human and Animal Nutrition units, the nutrition segment continues to expect 20% operating profit growth in 2022.
In response to the growing trends for all things sustainable, Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. It collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company launched Biosolutions to expand its portfolio of sustainable higher-margin solutions, particularly for pharmaceuticals and personal care markets.
Such endeavors are likely to help attain 10% revenue growth on an annual basis. In a recent development, Archer Daniels entered a joint venture with Gevo to help meet the demand for low-carbon, sustainable aviation fuel. It also shut down its ethanol facility in Peoria last October. The company is utilizing innovative technologies to develop products and boost operating capabilities.
Also, Archer Daniels remains on track with the Readiness goals of driving business improvement, standardizing functions and enriching consumers’ experience. As part of its readiness efforts, the company introduced a company-wide simplification initiative. Its strategic pillars for growth, as well as the aforementioned initiatives, are guided and supported by the Readiness program, focused on accelerating and enhancing competitiveness.
Driven by the aforementioned factors, management expects the third-quarter performance to be significantly higher year over year, driven by continued demand for its products and favorable ethanol blending economics.
Wrapping Up
We hope that strength in its nutrition unit, product innovation and solid demand will help sustain its momentum. The consensus mark for 2022 earnings has moved 7.1% north over the past 60 days to $6.76. Topping it, a long-term earnings growth rate of 7% and a VGM Score of A drive optimism.
Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chef Warehouse’s current financial year’s sales suggests growth of 40.7% from the year-ago reported numbers.
MGP Ingredients, which produces and markets ingredients and distillery products, currently sports a Zacks Rank of 1. MGPI has a trailing four-quarter earnings surprise of 76.8%, on average.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 22.4% and 10.4%, respectively, from the year-ago reported figures.
General Mills, which manufactures and markets branded consumer foods worldwide, currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year’s sales and earnings per share suggests growth of almost 2% and 1.5%, respectively, from the year-ago reported figures.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Archer Daniels (ADM) Banks On Solid Nutrition Unit, High Demand
Archer Daniels Midland Company (ADM - Free Report) looks well-positioned on the back of solid demand, improved productivity and product innovations. Persistent growth in the Nutrition segment bodes well.
This led to the robust earnings surprise trend, which continued in second-quarter 2022. The top and bottom lines beat the Zacks Consensus Estimate for the seventh straight quarter. Consequently, the Zacks Rank #2 (Buy) stock has gained 45.5% in the past year compared with the industry’s 25.2% growth.
Adjusted earnings of $2.15 per share surged 62% from $1.33 in the year-ago quarter. Revenues advanced 19% year over year to $27,284 million, driven by solid sales across the majority of segments. Adjusted segmental operating profit of $1,849 million was up 59.4% from the year-ago quarter. This marked the 11th straight quarter of adjusted operating profit growth.
Image Source: Zacks Investment Research
Speaking of its Nutrition unit, revenues in the segment rose 15.6% year over year. The segment’s adjusted operating profit grew 19% year over year, owing to significant gains in the Human and Animal Nutrition units.
The Human Nutrition unit gained from strength across its diverse product portfolio. Continued top-line growth in Flavors, particularly in North America, EMEA and South America, bodes well despite rising costs. Strength in alternative proteins led to strong soy protein volumes and margins. This, along with gains from the Sojaprotein buyout and healthy demand for texturants, aided the Specialty Ingredients category.
The Health & Wellness unit also witnessed robust quarterly improvement, driven by growth in probiotics, gains from its Deerland Probiotics buyout and solid fiber demand.
The animal nutrition unit grew significantly year over year, driven by robust volumes and margins in amino acids. Backed by strength across both Human and Animal Nutrition units, the nutrition segment continues to expect 20% operating profit growth in 2022.
In response to the growing trends for all things sustainable, Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. It collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company launched Biosolutions to expand its portfolio of sustainable higher-margin solutions, particularly for pharmaceuticals and personal care markets.
Such endeavors are likely to help attain 10% revenue growth on an annual basis. In a recent development, Archer Daniels entered a joint venture with Gevo to help meet the demand for low-carbon, sustainable aviation fuel. It also shut down its ethanol facility in Peoria last October. The company is utilizing innovative technologies to develop products and boost operating capabilities.
Also, Archer Daniels remains on track with the Readiness goals of driving business improvement, standardizing functions and enriching consumers’ experience. As part of its readiness efforts, the company introduced a company-wide simplification initiative. Its strategic pillars for growth, as well as the aforementioned initiatives, are guided and supported by the Readiness program, focused on accelerating and enhancing competitiveness.
Driven by the aforementioned factors, management expects the third-quarter performance to be significantly higher year over year, driven by continued demand for its products and favorable ethanol blending economics.
Wrapping Up
We hope that strength in its nutrition unit, product innovation and solid demand will help sustain its momentum. The consensus mark for 2022 earnings has moved 7.1% north over the past 60 days to $6.76. Topping it, a long-term earnings growth rate of 7% and a VGM Score of A drive optimism.
Other Stocks to Consider
Some other top-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , General Mills (GIS - Free Report) and MGP Ingredients (MGPI - Free Report) .
Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chef Warehouse’s current financial year’s sales suggests growth of 40.7% from the year-ago reported numbers.
MGP Ingredients, which produces and markets ingredients and distillery products, currently sports a Zacks Rank of 1. MGPI has a trailing four-quarter earnings surprise of 76.8%, on average.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings per share suggests growth of 22.4% and 10.4%, respectively, from the year-ago reported figures.
General Mills, which manufactures and markets branded consumer foods worldwide, currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year’s sales and earnings per share suggests growth of almost 2% and 1.5%, respectively, from the year-ago reported figures.