Australia Markets closed

How Archer-Daniels (ADM) Looks Just Ahead of Q3 Earnings

Zacks Equity Research

Archer-Daniels-Midland Company ADM is scheduled to report third-quarter 2019 numbers on Oct 31, before the opening bell. We note that in the trailing four quarters, the company’s bottom line has underperformed the Zacks Consensus Estimate, recording average positive earnings surprise of 4.2%. In the last reported quarter, the company delivered a negative earnings surprise of 1.6%.

What to Expect This Time

The Zacks Consensus Estimate for third-quarter earnings has moved south by 2 cents over the past seven days to 67 cents, suggesting a decline of 27.2% from the year-ago quarter’s reported figure.

For revenues, the consensus mark is pegged at $16,026 million, indicating an increase of 1.4% from the figure reported in the year-ago quarter.

Archer Daniels Midland Company Price, Consensus and EPS Surprise

Archer Daniels Midland Company Price, Consensus and EPS Surprise

Archer Daniels Midland Company price-consensus-eps-surprise-chart | Archer Daniels Midland Company Quote

Factors at Play

Archer Daniels’ three strategic pillars — optimize the core, drive efficiency and grow strategically — as well as focus on cost savings and Project Readiness are likely to get reflected in third-quarter results. Notably, Nutrition segment is likely to have contributed to the company’s operating profit. In the last earnings call, management guided substantial growth in the segment operating profit for the third quarter.

However, the company has been witnessing softness across its Carbohydrate Solutions segment, a trend which is most likely to have continued in the to-be-reported quarter. In second-quarter 2019, the segment’s revenues fell 7.8% year over year due to adverse weather in North America that impacted results in Starches and Sweeteners as well as Bio-products. Further, the segment’s adjusted operating profit slid 22.3%. Management expects decrease in revenues from Carbohydrate Solutions segment for the third quarter.

Zacks Model

Our proven model doesn’t conclusively predict an earnings beat for Archer-Daniels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Archer-Daniels carries a Zacks Rank #4 (Sell) and Earnings ESP of -5.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

e.l.f. Beauty, Inc. ELF has an Earnings ESP of +10.71% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands Inc. NWL has an Earnings ESP of +6.73% and a Zacks Rank #2.

Molson Coors Brewing Company TAP has an Earnings ESP of +4.56% and a Zacks Rank #3.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Newell Brands Inc. (NWL) : Free Stock Analysis Report
 
Molson Coors Brewing Company (TAP) : Free Stock Analysis Report
 
e.l.f. Beauty Inc. (ELF) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research