Key Takeaways
- Shares of agriculture giant Archer-Daniels-Midland Co. plummeted more than 20% Monday after it announced a probe into the accounting practices of its nutrition division.
- The Chicago-based grain merchant placed Chief Financial Officer (CFO) Vikram Luthar on leave, appointing company veteran Ismael Roig as its interim CFO.
- ADM lowered its 2023 earnings outlook and postponed its fourth-quarter earnings report.
Agriculture commodity giant Archer-Daniels-Midland Co. (ADM) cut its outlook for the 2023 fiscal year and put a top executive on leave after it announced an investigation into its accounting practices, sending its shares skidding more than 20% in intraday trading Monday.
The Chicago-based grain merchant on Sunday said it placed Chief Financial Officer (CFO) Vikram Luthar on leave as it investigates accounting practices and procedures in ADM’s nutrition department. The investigation was spurred by a voluntary document request from the U.S. Securities and Exchange Commission (SEC), with which ADM said it was cooperating.
The company appointed Ismael Roig as the interim CFO, a veteran at the company with two decades of executive experience.
As part of the CFO announcement, ADM updated its outlook for 2023, saying it now expects to deliver adjusted earnings per share (EPS) of $6.90, lower than the “in excess of $7 per share” it forecast in its October 2023 third-quarter report. The company is also pushing its fourth-quarter earnings report back from this week.
The investigation comes after ADM reported in October that it would lower its profit guidance for its nutrition unit for 2023, but had projected a return to profit growth for it in 2024.
ADM has devoted up to $300 million in investment to the plant-based food market as part of its nutrition division, but later indicated that it would change the scope of that program due to a “lower growth demand environment,” Luthar said in the company’s October earnings call.
By 2 p.m. ET, ADM shares had dropped about 22% to just above $53.