Key Takeaways:
ADM raised its 2026 adjusted earnings forecast to $5.15-$5.60 per share, a second increase this year, as US biofuels rules boost demand.
The updated outlook reflects expected year-over-year earnings improvement in ADM's crushing and ethanol businesses, the Chicago-based company said in a statement Tuesday. Analysts polled by FactSet had expected adjusted earnings of $4.82 per share for the full year.
Second-quarter adjusted earnings also beat analysts' expectations. The Zacks consensus estimate for the quarter was $1.27 per share, implying 36.6% year-over-year growth. The company first raised its guidance in May to $4.15-$4.70 per share.
The Trump administration earlier this year issued new rules requiring gasoline and diesel to contain more biofuels, creating sustained demand visibility for ADM's biofuel-related segments. ADM is one of the largest processors of soybeans and corn globally, with crushing and ethanol operations directly exposed to the policy shift.
The new rules, issued by the Environmental Protection Agency, set annual biofuel blending requirements for refiners and importers. The mandate covers conventional ethanol, advanced biofuels, and biomass-based diesel, with compliance obligations extending through 2027. For ADM, the policy directly benefits its ethanol production capacity and soybean crushing operations, which supply feedstock for renewable diesel production.
Peer Bunge Global SA also raised its full-year 2026 adjusted earnings guidance to $9.25-$9.75 per share from $9.00-$9.50, reporting Q2 adjusted EPS of $2.00, up 52.7% year over year. Net sales surged 88.3% to $24.04 billion, reflecting the combined company's expanded footprint following the Viterra transaction. Bunge's soybean processing volumes increased to 11,524 thousand metric tons from 9,304 thousand metric tons, with the largest increase driven by greater production capacity in Argentina. Softseed processing volumes jumped 79.3% to 3,490 thousand metric tons, with adjusted segment EBIT rising to $255 million from $14 million.
The company did not disclose specific Q2 revenue or EPS figures in the statement, but the beat against the $1.27 consensus suggests momentum across its core processing segments. ADM's trailing four-quarter average earnings surprise stands at 5.36%, according to Zacks data.
The biofuels mandate creates a structural tailwind for crop processors across the sector. ADM's crushing margins benefit from higher ethanol and renewable diesel demand, while the company's scale in soybean and corn processing provides volume advantages. The guidance raise points to sustained margin expansion in ADM's crushing and ethanol segments through the remainder of 2026. Investors will watch the company's Q2 earnings call for updated segment-level margins and capacity utilization data, with the biofuels mandate providing a structural demand backdrop.
This article is for informational purposes only and does not constitute investment advice.
