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Archer-Daniels-Midland tumbles as accounting issues persist
The company’s earnings announcement didn’t go particularly smoothly.
As far as earnings announcements go, this one was something of a comedy of errors.
Agricultural-products giant Archer-Daniels-Midland dove in premarket trading after it reported “preliminary” earnings per share on Monday evening that drastically missed expectations. But that’s not all.
The results were “preliminary” due to the fact that the company had discovered a new “material weakness in its internal control over financial reporting related to its accounting practices,” it said.
That new weakness, it seems, was discovered as the company had been trying to correct previous problems with earnings statements, which stemmed from conversations with the SEC. It also said Tuesday it would have to restate last year’s annual report and its most recent quarterly results.
If it’s any solace to investors, those restatements are “not expected to materially impact results on a consolidated basis,” the company said. Less reassuring was the fact that ADM suddenly postponed its earnings call with analysts, slated for Tuesday morning.
For those surprised that an earnings report from an almost 150-year-old maker of seed oils, ethanol, and corn syrup could be so melodramatic, we would direct you to the criminally underappreciated 2009 business flick “The Informant!” directed by Steven Soderbergh.
Based on a true story, it stars Matt Damon as grandiose ADM executive Mark Whitacre, who had been secretly feeding information to the Feds about ADM price-fixing schemes involving key foodstuffs products like citric acid and corn syrup. Those schemes resulted in convictions of ADM executives, including Whitacre himself, on price-fixing and embezzlement charges in the late 1990s.
Who knew corn syrup could be so interesting!
Archer-Daniels-Midland shares have lagged the market badly this year, falling more than 30% compared to the S&P’s more than 20% gain.
