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(Updates shares in paragraph 1, added analyst commentary in paragraph 6, results details in paragraphs 9-11) by Mrinalika Roy and Sourasis Bose
Archer-Daniels-Midland's actions
ADM.N fell 8% premarket on Tuesday after the global grain trader cut its adjusted annual profit forecast and said it would amend its previous financial statements after discovering new accounting irregularities.
The company is expected to lose approximately $2.3 billion of its market value if pre-market losses continue throughout the day.
Archer-Daniels-Midland said it will amend its Form 10-K for fiscal 2023 and its financial statements for the first and second quarters of this year.
This comes months after ADM corrected six years of financial data after an internal investigation found that some sales between the company's business units were not recorded correctly.
The accounting irregularities triggered several government investigations and led to the departure of chief executive Vikram Luthar in September.
“Investors will undoubtedly be disappointed by the return of this accounting problem,” said Arun Sundaram, an analyst at CFRA, adding that they will also wonder whether ADM will meet its 2025 financial targets, set three years ago.
The company postponed its earnings conference call, which was scheduled for Tuesday, and now plans to hold a webcast after filing the amended statements.
The restated statements will include certain newly identified errors regarding additional cross-segment sales for its three main segments, the company said late Monday.
ADM said it did not expect a material impact and was working to complete the restatements as soon as “reasonably possible”, but it cut its 2024 adjusted earnings forecast to 4, 50 to $5 per share, compared to the previously estimated $5.25 to $6.25.
The company reported adjusted earnings per share of $1.09 for the third quarter ended Sept. 30, compared with analysts' average estimate of $1.25, according to data compiled by LSEG.
ADM's operating profit in the agricultural services and oilseeds sector, the largest by revenue, fell 43% from a year earlier.
The company also paid $96 million in settlement awards during the quarter.
