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Factors Likely to Influence Archer Daniels' (ADM) Q4 Earnings

Archer Daniels Midland Company ADM is slated to report fourth-quarter 2022 results on Jan 26, before market open.

The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $1.6 per share, which suggests growth of 6.7% from the year-ago quarter’s reported figure. However, the consensus mark has moved up 2.6% in the past 30 days. For fourth-quarter revenues, the consensus mark is pegged at $26.4 billion, suggesting 14.2% growth from the prior-year quarter’s reported figure.

In the last reported quarter, the company delivered an earnings surprise of 31%. Its earnings outperformed the Zacks Consensus Estimate by 26.2%, on average, in the trailing four quarters.

Archer Daniels Midland Company Price and EPS Surprise

 

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

Key Factors to Note

Archer Daniels has been gaining from solid demand, improved productivity, product innovations and persistent growth in the Nutrition segment. On its last reported quarter’s earnings call, management expected the Nutrition segment to witness year-over-year growth in the fourth quarter of 2022.

Significant gains in the Human Nutrition unit have been aiding the Nutrition business. Within the Human Nutrition unit, solid demand for plant-based proteins, a robust performance in texturants and strength in Specialty Ingredients, bodes well. Continued momentum in the Flavors unit should have contributed to growth in the fourth quarter.

The company has been expanding its solutions portfolio, which forms part of its Carbohydrate Solutions unit. It has also been utilizing innovative technologies to develop products and boost operating capabilities. Such endeavors are expected to have aided the company’s top line in the quarter under review.

However, Archer Daniels has been exposed to headwinds, including higher performance-related compensation, project-related costs, and shifting costs from business segments into the centralized centers of excellence in the supply chain and operations. It has also been reeling under the impacts of the pandemic and inflationary pressures.

What the Zacks Model Unveils

Our proven model does not 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Archer Daniels has a Zacks Rank #2 and an Earnings ESP of -1.66%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

TreeHouse Foods THS has an Earnings ESP of +5.88% and a Zacks Rank #2 at present. THS is likely to register bottom-line growth when it reports the fourth-quarter 2022 numbers. However, the Zacks Consensus Estimate for its quarterly revenues is pegged at $1.03 billion, which suggests a decline of 11.7% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for TreeHouse’s quarterly earnings has moved down 15.7% in the past 30 days at 91 cents per share, suggesting growth of 727.3% from the year-ago quarter’s reported number. THS has delivered a positive earnings surprise of 56.3%, on average, in the trailing four quarters.

The Boston Beer Company SAM has an Earnings ESP of +13.39% and a Zacks Rank #3 at present. SAM is likely to register top and bottom-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $403.2 million, which suggests growth of 15.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Boston Beer’s quarterly earnings has moved down 5.9% in the past 30 days to 64 cents per share, suggesting growth of 811.1% from the year-ago quarter’s reported number. SAM has delivered a negative earnings surprise of 52.1%, on average, in the trailing four quarters.

Colgate-Palmolive CL has an Earnings ESP of +2.13% and a Zacks Rank #3 at present. CL is likely to register top-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.6 billion, which suggests growth of 3.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Colgate’s quarterly earnings has moved down by a penny in the past seven days to 76 cents per share, suggesting a decline of 3.8% from the year-ago quarter’s reported number. CL has delivered a positive earnings surprise of 0.4%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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