Biofuels Boom Powers Another ADM Outlook Raise

Archer-Daniels-Midland Co. (NYSE: ADM ) stock traded higher Tuesday after the agricultural commodities and food processing company reported second-quarter results that topped Wall Street expectations and raised its full-year earnings outlook above analyst estimates.

Adjusted earnings were $1.84 per share, beating the consensus estimate of $1.44.

Revenue increased to $22.7 billion, ahead of analysts’ expectations of $21.8 billion.

Total segment operating profit surged 75% year over year to $1.5 billion, driven by strong execution, favorable biofuels margins and continued momentum in the Nutrition business.

Ag Services And Oilseeds Drive Growth The Ag Services and Oilseeds segment posted operating profit of $867 million, up 129% from a year earlier, as higher asset utilization, strong crush margins, favorable biofuel economics and improved agricultural supply chain execution boosted results.

Global oilseed processing volumes increased nearly 5% year over year.

Ag Services operating profit jumped 159% to $293 million, benefiting from ADM’s global infrastructure, stronger South American operations and the return of Brazil’s Barcarena grain export terminal to full operations.

Crushing operating profit rose about $330 million from a year earlier to $363 million, supported by strong biofuel margins, higher domestic demand following renewable volume obligation policy updates and elevated global energy prices.

Stronger energy prices and lower U.S. corn costs improved ethanol competitiveness, lifting domestic blending demand and exports.

Carbohydrate Solutions And Nutrition Improve The Carbohydrate Solutions segment reported operating profit of $411 million, up 22% year over year, driven by stronger ethanol margins and policy incentives.

Vantage Corn Processors operating profit increased to $85 million, up $52 million year over year, supported by improved ethanol margins, policy support and effective risk management.

Nutrition operating profit climbed 51% year over year to $172 million, led by strong Flavors performance, progress at the Decatur East facility and improvements in Animal Nutrition.

Human Nutrition operating profit also increased 51% to $139 million, primarily due to growth in the Flavors business and operational improvements.

Cost Savings Progress ADM said it remains on track to deliver $500 million to $750 million in cost savings over three to five years through initiatives focused on finance, technology, automation and digitization.

The company said its “Frictionless Finance” initiative has reduced accounts payable transaction costs by 25% since the start of 2026.

Outlook ADM raised its fiscal 2026 adjusted earnings guidance to a range of $5.15 to $5.60 per share from its prior outlook of $4.15 to $4.70.

The new forecast is above the analyst consensus estimate of $4.79.

The company said the improved outlook reflects strong first-half performance, continued business momentum and expected year-over-year earnings growth in its crushing and ethanol businesses.

Archer-Daniels Midland attributed its stronger outlook to a favorable biofuels market, saying higher renewable fuel margins, elevated global energy prices and robust North American ethanol economics helped drive a sharp increase in second-quarter earnings.

CEO Juan Luciano said strong commercial execution and improving Nutrition results, combined with the constructive biofuels environment, gave the company confidence to raise its full-year 2026 adjusted earnings guidance for a second time.

Management expects second-half operating profit to exceed first-half levels, with the third quarter potentially stronger than the fourth because of seasonal trends in the Flavors business and uncertainty surrounding crush margins.

ADM also said it continues expanding its Natural Colors business to capitalize on growing demand for cleaner-label products, targeting a U.S. market opportunity of about $1 billion and long-term operating profit potential of $80 million to $100 million.

The company increased its expected 2026 net benefit from the 45Z clean fuel tax credit to about $250 million from its prior estimate of $150 million, citing continued strength in the biofuels market.

ADM Price Action: Archer-Daniels-Midland shares were up 1.86% at $79.51 at the time of publication on Tuesday, according to Pro data.

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