ADM (ADM) Q3 2026 earnings review
ADM raises its profit outlook, but Nutrition growth stalls
Wide North American biofuel margins are carrying ADM, the crop trader and food ingredient maker, while its specialty nutrition turnaround paused. Revenue grew 10% from a year ago and profit per share excluding one-offs nearly doubled on surging soybean crushing and ethanol profits. Chair and chief executive Juan Luciano raised the full-year profit outlook for a third time, though by our math the plan points to fourth-quarter profit dropping 25% from the third quarter.
| Revenue | $22.3B +9.6% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $1.77 +92% from a year ago |
| Return on capital, excluding one-offs | 9.0% 7.8% last quarter |
| Full-year profit per share outlook | Raised $0.28 middle of the range: $5.65 (+65%) |
⚖️ Verdict: 🟢 Bullish
The story got better because the biofuel earnings recovery lifted trailing return on invested capital to 9%, finally clearing the company's borrowing costs. One caution: the non-commodity Nutrition division stalled due to unplanned plant downtime and input inflation, and only $35 million of expected hedge timing gains came back this quarter.
The question now is whether current earnings mark a peak tied to government fuel mandates or a higher baseline supported by internal fixes. If internal fixes are working, Nutrition profit will rebound and corporate overhead will stop rising; if fuel rules are doing all the work, profit will flatten once the company laps this year's policy boost. Fourth-quarter segment margins and the 2027 outlook will tell.
🐂 Bull Case
Biofuel Rules Drive the Third Outlook Raise
ADM processes soybeans, corn and wheat into food ingredients, animal feed and biofuels. Chair and chief executive Juan Luciano credited "a constructive biofuels environment combined with our extensive North American footprint" for a 64% jump in total segment operating profit to $1.38 billion. United States federal biofuel blending rules finalized in March, called Renewable Volume Obligations (RVO), lifted demand for vegetable oil and ethanol. That widened gross margin by 2.2 percentage points as cost of products sold fell to 91.6% of sales.
- Crushing operating profit: $311 million, up from $13 million a year ago
- Refined Products and Other operating profit: $218 million, up 82% from a year ago
- Vantage Corn Processors (dry-mill ethanol) operating profit: $146 million, up from $43 million a year ago
The profit jump came almost entirely from wider margins rather than factory throughput, because oilseed crushing volumes rose only 1.6%. Management raised its full-year profit outlook for the third quarter in a row, though the $0.275 per share raise at the middle of the range is smaller than the $0.95 raise three months ago.
What to watch: fourth-quarter Crushing operating profit when full-year results arrive. A reading near third-quarter levels would show that customers kept paying wide processing margins on the open fourth-quarter order book.
Return on Capital Cleared Borrowing Costs
For the past two years, the agricultural processor earned less on its factories and working capital than its roughly 7.5% to 8.0% cost of capital. Trailing four-quarter return on invested capital excluding one-offs (Adjusted ROIC) rose to 9.0% this quarter, up from 7.8% in the second quarter and 6.7% a year ago. Trailing four-quarter Adjusted ROIC earnings reached $2.87 billion on $31.97 billion of average invested capital.
Crossing the cost of capital eases a standing concern that the business cannot earn adequate returns even during a strong biofuel cycle. One print does not settle the through-cycle debate, because trailing returns still sit below management's 10% long-term target and benefit from lopsided comparisons against last year's trough.
What to watch: full-year 2026 Adjusted ROIC next quarter. A figure that holds at or above 9.0% as fourth-quarter working capital settles would bring the company within reach of its 10% target.
Positives this quarter didn't test
Two multi-year growth plans received no new data in the earnings release.
- Natural food colors: management targets $80 million to $100 million of operating profit uplift over time as US food makers replace artificial dyes, and conference call remarks or the full-year report will show if more customer contracts signed.
- US crushing plant expansions: the company plans low-cost capacity additions across four plants through 2029, and cutting this year's capital spending outlook by $150 million at the middle of the range leaves project timing to be confirmed on the call.
🐻 Bear Case
Nutrition Recovery Stalled on Downtime and Inflation
"ADM delivered strong third quarter results, with earnings up significantly from the prior year quarter and operating profit growth across all segments," Luciano said. Nutrition, the division that makes food flavors, health ingredients and animal feed, is meant to provide steady growth outside commodity cycles. Its operating profit grew just 3.1% from a year ago to $134 million and fell 22.1% from last quarter's $172 million, as segment sales dropped 4.1% to $1.84 billion.
Human Nutrition operating profit fell 3.1% to $93 million, though by our math it rose 8.1% after stripping $10 million of insurance payouts from last year's base. Even so, the company cited "unplanned downtime, inflation pressures impacting certain input costs, market softness in Biotics" as headwinds that offset recovery at its Decatur East plant. That breaks a six-quarter streak of clean execution in the division.
What to watch: Human Nutrition operating profit and factory uptime commentary in the quarterly filing. Another sequential drop beyond normal fourth-quarter beverage seasonality would show that plant reliability problems are still holding back the turnaround.
Timing Reversal Fell Short and Overhead Rose
ADM records mark-to-market timing swings when commodity and currency hedges move before physical inventory ships. After taking roughly $175 million of net negative timing hits in the first half of 2026, management expected most of that deficit to reverse back into profit during the third quarter. Instead, the quarter included only $35 million of net positive mark-to-market timing impacts, led by $45 million in Refined Products and Other while Crushing and Ag Services stayed negative.
At the same time, overhead costs kept climbing despite a multi-year plan to cut $500 million to $750 million in expenses. Unallocated corporate function costs rose 14.7% from a year ago to $304 million, and selling, general and administrative expenses rose 8.4% to $946 million (4.2% of revenue).
What to watch: fourth-quarter mark-to-market timing impacts and the full-year cumulative cost savings disclosure. If the remaining ~$140 million timing deficit does not reverse in the fourth quarter, ADM lost those gains to market moves.
Ethanol Subsidies Mask Shrinking Sweetener Demand
Carbohydrate Solutions grinds corn to make both food sweeteners and fuel ethanol, and its operating profit rose 39.9% from a year ago to $470 million. Inside that division, Starches and Sweeteners operating profit grew 10.6% to $324 million. The release noted that strong ethanol margins and government policy incentives offset "continued softness in liquid sweetener margins and volumes".
That split matters because two forces pull the division in opposite directions. Sweetener demand faces long-term pressure from weight-loss drugs and diet shifts, while ethanol profit leans on Section 45Z clean-fuel tax credits whose final Treasury rules remain subject to policy risk. Furthermore, South American crushing margins suffered this quarter from a delay in Brazil's biofuel policy changes, showing how quickly government delays hurt margins.
What to watch: liquid sweetener volume commentary in the quarterly filing's management discussion. A steeper volume drop would leave the corn milling business even more reliant on government fuel credits in 2027.
Risks this quarter didn't answer
Three standing risks depend on disclosures that only appear on the conference call or in the quarterly filing.
- Forward crush margin coverage: the release does not state how much of fourth-quarter and early-2027 crushing capacity is locked in at current margins, which executives usually share on the call.
- Global grain trade disruptions: Ag Services operating profit fell 9.5% to $172 million on weaker global supply chain results, and the filing will detail whether Black Sea disruptions or Chinese soybean buying drove the drop.
- Shareholder and ethanol lawsuits: the company booked $62 million of pre-tax charges for contingency provisions, inventory adjustments and severance, and the filing's legal footnote will show if any of that relates to pending class actions.
👓 Other Themes
ADM Resumed Buybacks After Sitting Out the Trough
After buying back no shares throughout 2025 and the first half of 2026 while profits were depressed, the grain trader spent $358 million on share repurchases during the third quarter. The buybacks followed management's statement last quarter that it was evaluating a return to repurchases later this year, and diluted share count stayed unchanged from a year ago at 484 million.
💲 Other KPIs
Crushing plants processed 1.6% more oilseeds than a year ago, when maintenance downtime depressed output, but volume fell 5.6% from the second quarter's 9,477 thousand metric tons. That slowdown shows the 105% jump in Ag Services and Oilseeds profit came from wider biofuel processing margins rather than higher factory volume.
Cash tied up in day-to-day inventory and receivables jumped 34.9% from a year ago and 17.3% from June. That $1.23 billion nine-month working capital build pushed nine-month operating cash flow down 69.0% to $1.79 billion and lifted net debt by 20.6% from a year ago to $7.98 billion by our math.
🔮 Guidance
Raised. The middle of the full-year plan moved up $0.275 to $5.65 per share, or 64.7% growth from last year. By our math, subtracting $4.33 earned in the first nine months leaves $1.32 per share for the fourth quarter, up 51.7% from a year ago but down 25.4% from the third quarter. It is the third raise this year: +$0.50, +$0.95, and now +$0.275.
Cut. The processor lowered its full-year capital spending plan by $150 million at the middle of the range to $1.25 billion, citing "continued prioritization of high-return investments". After spending $773 million in the first nine months ($307 million in the third quarter), the new plan still leaves $477 million for the fourth quarter by our math.
❓ Key Questions
Why did only $35 million of hedge timing losses reverse?
Management expected most of the roughly $175 million first-half mark-to-market timing deficit to reverse in the third quarter, but only $35 million came back. Investors need to know whether the rest is deferred into the fourth quarter or lost to market price moves.
What caused the new unplanned downtime in Human Nutrition?
Human Nutrition operating profit fell 3.1% as unplanned plant downtime and input cost inflation offset the reopening of Decatur East. Management should explain which facility went down and whether the repairs are finished.
How much of the 2027 crush book is locked in?
With 2026 nearly finished and fourth-quarter profit implied down 25% from the third quarter by our math, the case now turns to whether customers are locking in early-2027 soybean and canola crushing margins at current levels.
Did the $150 million capex cut delay US plant expansions?
Lowering the full-year capital spending plan to $1.2–$1.3 billion marks the second year in a row spending fell below the initial $1.3–$1.5 billion range. Management should clarify if the phase-one US crushing capacity unlocks remain on schedule.