Yahoo Finance Analysts Expect ADM’s Earnings to Fall in Fiscal 4Q15
ADM's Fiscal 4Q15: Another Disappointing Quarter?
Earnings: A falling trend
Archer Daniels Midland (ADM) has followed a falling trend in year-over-year growth in earnings since fiscal 2Q15. Before fiscal 2Q15, the company delivered high positive growth in earnings. It reported EPS (earnings per share) of $0.6 for fiscal 3Q15, a fall of 26% when compared to fiscal 3Q14. It also missed the consensus estimates by 14%. ADM has beaten analyst estimates for earnings since fiscal 2Q14. It, however, missed the estimates in both fiscal 2Q15 and 3Q15.
Earnings estimates
Analysts predict a fall in EPS of 34% to $0.66 in fiscal 4Q15 as compared to the same quarter a year ago. Analysts lowered their estimates for fiscal 4Q15. Soon after the fiscal 3Q15 results were announced, analysts had expected EPS of $0.96 on revenues of $20.9 billion for fiscal 4Q15. For the full year, analysts had anticipated EPS of $3.02 on revenues of $74.6 billion.
Analysts now anticipate EPS of $2.65 on revenue of $70.7 billion for fiscal 2015. The analysts that follow this company are expecting it to grow earnings at an average annual rate of 4.1% over the next five years. This year, analysts are forecasting an earnings fall of -16.41% over last year. Also, analysts expect earnings growth next year of 15.0% over this year’s forecast earnings.
Share repurchase
Over 2015, ADM has spent about $1.8 billion to repurchase around 37.5 million shares toward the 2015 target of repurchasing $1.5 billion–$2 billion worth of shares, subject to strategic capital requirements. The company’s average share count for the first nine months was 627 million of diluted shares outstanding, falling by 31 million from 3Q14.
At the end of the third quarter, the company had 607 million shares outstanding on a fully diluted basis. It expects to complete about $2 billion worth of share repurchases by the end of the calendar year and to finish the year with about 600 million shares outstanding on a diluted basis.
Peers’ earnings
Archer Daniels Midland’s peers in the industry include Campbell Soup (CPB), Hormel Foods (HRL), and Tyson Foods (TSN). They reported EPS of $0.95, $0.74, and $0.83, respectively, in their most recent quarters. To further gain exposure in ADM stock, you can invest in ETFs such as the First Trust Consumer Staples AlphaDEX Fund (FXG) and the Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) that invest 3.0% and 2.5%, respectively, in the ADM stock. In the next article, we’ll see the moving averages for ADM and its peers.
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