ADM stock tumbles following SEC accounting probe

Shares of Archer-Daniels-Midland (ADM) are plunging as the company slashes its earning outlooks amid an investigation into its Nutrition segment's accounting.

Yahoo Finance’s Seana Smith and Brad Smith weigh in on the ongoing challenges ADM and its stock face while CFO Vikram Luthar has been placed on administrative leave through this Securities and Exchange Commission (SEC) probe.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

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SEANA SMITH: All right. We are also watching shares of Archer Daniels Midland ADM sinking after slashing its earnings outlook, amid a pending investigation into its accounting practices. Now, the company has also put its CFO on leave effective immediately. You're looking at the stock off just about 17% ahead of the open. If that decline does hold into the open, we'd be looking at the largest intraday drop that we have seen for the stock since April of 2005.

So putting that in perspective, and right now wiping off more than $6 billion off its market value. So they're withdrawing their outlook for their nutrition unit and focusing on that because this company has spent billions of dollars expanding their nutrition business over the last 10 years.

And this segment operating income forecast, they forecasted it to drop more than 18% in 2023. That would be the lowest, Brad, since 2020. So you stack all of that up, obviously, a number of headwinds facing ADM stock, and you're seeing some of that concern reflected in the share price here this morning.

BRAD SMITH: Yeah. We do know that as well that Ismael Roig is going to be the interim CFO, Chief Financial Officer, at the company as well, and had previously served as president of their EMEA division at the company and oversight of all the businesses within that region. But as you think about going forward what this is going to mean for some of the disclosures as well, pushing back some of the timing for their reporting, and then additionally saying that they're going to be providing an update on that 2023 outlook.

Announcing the expected delay of the earnings release and conference call related to the fourth quarter and full year 2023 financial results as they have to do some reconciliation here.