Adds CEO and analyst quotes, updates shares

By Karl Plume and Mrinalika Roy

CHICAGO, May 6 (Reuters) - Tariffs and trade chaos stung Archer-Daniels-Midland ADM.N as the grains merchant on Tuesday posted its weakest first-quarter profit in five years and warned of eroding returns amid U.S. President Donald Trump's efforts to redraw global markets.

Slumping sales and weak crop-processing margins slashed operating profit by more than half for ADM's ag services and oilseeds unit, its largest division, more than offseting flat to stronger results in its other business segments.

ADM shares were up 2.6% at $48.75 as results bested Wall Street expectations.

"With uncertainty related to global trade and regulatory policy continuing to have an impact on the business, we were able to drive positive momentum in focused areas," CEO Juan Luciano said.

Trade tensions between the U.S. and China, the largest crop importer, are creating a drag for ADM, which has seen its profit erode in recent quarters due to ample global crop supplies and thinning margins.

ADM is also reeling from an accounting scandal that sparked federal investigations and sent its stock price tumbling, with shares nearly 30% since news of the financial irregularities broke in January last year.

The company is responding to the challenges through a cost-cutting and consolidation push. ADM said in February it planned to cut costs by $500 million to $750 million over the next three to five years and has been slashing jobs and downsizing operations since then.

ADM reaffirmed its full-year adjusted earnings forecast of $4 to $4.75 per share, but said it expects profit at the lower end of the range. Although it would be the company's weakest performance since 2020, the guidance was not as dire as some investors had feared.

"Investors had generally expected much weaker guidance, given the sharp deterioration in the macroeconomic environment in recent months," said Arun Sundaram, senior equity analyst at CFRA Research.

Ag services and oilseeds segment operating profit tumbled 52% in the first quarter while ADM's carbohydrate solutions division saw earnings slip 3% as improved ethanol biofuel results offset lower starches and sweeteners margins.

A 13% operating profit bump in the company's much smaller nutrition segment and lower costs helped the global grain merchant's first-quarter results.

The Chicago-based company posted an adjusted profit of 70 cents per share for the three months ended March 31, down from $1.46 per share in the first quarter last year but above analysts' average estimate of 67 cents, according to data compiled by LSEG.

(Reporting by Karl Plume in Chicago and Mrinalika Roy in Bengaluru; Editing by Shinjini Ganguli, Hugh Lawson and Nick Zieminski)

((karl.plume@thomsonreuters.com; +1 313 484 5285))