(Reuters) -Grain trader Archer-Daniels-Midland on Tuesday beat Wall Street expectations for first-quarter profit, but said it expects full-year adjusted earnings at the lower end of its previous forecast due to challenging macro-economic conditions.
Trade tensions between the U.S. and China are creating headwinds for ADM, which has seen its profit erode in recent quarters due to a slump in global crop prices and weak crop processing margins.
ADM relies on trade between top farm goods exporter the United States and China, the top importer.
It is also reeling from an accounting scandal last year that drew federal scrutiny and sent its stock price tumbling.
The company is responding to all these challenges through a cost-cutting and consolidation push. ADM said in February it planned to cut costs by $500 million to $750 million over the next three to five years and has been slashing jobs and downsizing operations since then.
ADM reaffirmed its full-year adjusted earnings forecast of $4 to $4.75 per share, but said it expects profit at the lower end of the range.
Strong performance at its Nutrition unit and lower costs helped the global grain merchant’s first-quarter results.
The Chicago-based company posted an adjusted profit of 70 cents per share for the three months ended March 31, compared with analysts’ average estimate of 67 cents, according to data compiled by LSEG.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Shinjini Ganguli)
Comments