ANDE

Andersons has delivered a strong multi year run for shareholders, so the current question for anyone looking at the stock is whether the recent price still lines up with the earnings that support it. - Over the past 5 years the share price has gained 122.3%, which puts real weight on whether the current valuation is adequately backed by Andersons' profit generation. - The business model ties closely to execution quality and margin discipline, so any change in how efficiently Andersons converts revenue into earnings can reshape what looks reasonable to pay for the stock today. - Your read on Andersons is one view; the desks covering it have another. See what analysts think Andersons's shares could be worth. The issue now is whether Andersons' current share price around US$63.89 is appropriately supported by its earnings profile. If you want a quick yardstick while you weigh Andersons against other earnings focused opportunities, compare it with companies in the 28 high quality undervalued stocks for additional context. The P/E ratio suits Andersons because earnings are a key way investors frame what they pay for this kind of business. At around 12.1x earnings, the stock trades well below the broader Consumer Retailing sector average near 18.0x, and also below peers around 34.4x. That is a wide gap between what the market pays for Andersons earnings and what it currently pays for comparable companies in the same space. A tailored fair multiple for Andersons that blends its sector, size, profitability and risk points to a higher P/E than the market is assigning today, so the shares screen as undervalued on this metric. For you as an investor, that means the current price reflects a lower earnings multiple than the model suggests might be appropriate, which can matter if you lean heavily on earnings based comparisons when you rank opportunities. Explore the numbers behind Andersons's P/E valuation. Simply Wall St Narratives pick up where the Andersons valuation puzzle leaves off by spelling out which paths for growth, margins and earnings would need to play out for the stock to be worth significantly more or less than it is today. Each narrative turns that into a clear, testable view about Andersons' business that you can track over time, rather than a single static estimate. One of the top community narratives on Andersons: 29% undervalued "Capital projects aimed at debottlenecking ethanol plants and reducing carbon intensity, including the Class VI CO₂ sequestration well at Clymers…" Discover why this Narrative puts Andersons at 29% undervalued. Valuation only tells part of the Andersons story, because the research also highlights specific pressure points in the checks that readers may want to weigh before deciding how confident to feel. Take a closer look at 2 warning signs before settling on a valuation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ANDE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Download the Complete Report Here Key Takeaways: Record second-quarter earnings reflected materially stronger core ethanol economics alongside a larger 45Z contribution. REX reported 2Q FY26 net sales and revenue of $168.5 million, up 6.3% from $158.6 million in 2Q FY25, while gross profit increased to $53.3 million from $14.3 million and gross margin expanded to 31.6% from 9.0%. 45Z production tax credit income contributed $18.4 million during the quarter, while core profitability also improved sharply, with gross profit excluding 45Z at approximately $34.9 million, up roughly 144% y/y. Income before taxes increased to $48.1 million from $12.1 million, and net income attributable to REX shareholders reached $34.9 million versus $7.1 million. Diluted EPS increased to $1.06 from $0.22, marking the strongest fiscal second quarter in company history and extending REX’s profitability streak to 24 consecutive quarters. Improved crush margins were the principal operating driver, with stronger ethanol and co-product pricing broadening the earnings improvement. Consolidated ethanol sales were 70.6 million gallons, consistent with 70.6 million gallons in the prior-year quarter, while realized ethanol pricing net of hedging increased to $1.78 per gallon from $1.75. Ethanol revenue reached approximately $125.8 million, representing 74.7% of quarterly revenue. Dried distillers grain ASP increased 16% to $166.55 per ton from $143.63, with volume of 145,081 tons versus 148,017 tons, generating approximately $24.2 million of revenue. Distillers corn oil provided another meaningful margin contribution, with volume increasing to 24.3 million pounds from 23.1 million and ASP rising 33% to $0.72 per pound from $0.54, resulting in approximately $17.6 million of revenue. Modified distillers grains contributed another $0.8 million at an ASP of $65.10 per ton. The improvement across ethanol, DDG and corn oil is consistent with a stronger crush environment and reinforces the earnings contribution from product mix as REX prepares to add incremental One Earth capacity. 45Z has become a material and increasingly visible earnings layer, with the quarterly contribution more than doubling sequentially. REX recognized $18.4 million of 45Z production tax credit income in 2Q, up from $7.5 million in 1Q, bringing 1H FY26 credits to approximately $26.0 million, net of estimated monetization expenses. REX currently intends to sell the transferable 45Z credits earned in FY26, compared with using FY25 credits to offset taxes due. Including $31.7 million recognized in FY25, cumulative 45Z benefits from consolidated facilities have reached approximately $57.7 million, including minority interests. The 2Q credit represented approximately 34.5% of reported gross profit of $53.3 million, while the first-half contribution represented approximately 31.5% of gross profit of $82.4 million. Because 45Z is recorded within gross profit rather than revenue, its growing contribution is making reported margins structurally less comparable with prior periods and should scale further as One Earth adds production volumes eligible for the credit. CCS creates a second economic layer through 45Q and potentially higher 45Z economics. Under the current framework, 45Z credits can be earned in $0.10 per gallon increments from $0.10 to $1.00 per gallon based on carbon intensity, with the first $0.10 available below a CI score of 47.5 and the program currently extending through calendar 2029. The 45Q framework provides an $85 per ton credit for qualifying sequestered carbon for 12 years following project commencement, with direct pay available during the first five years, and REX estimates potential annual 45Q benefits of approximately $36 million. During the 2025 to 2029 overlap period, REX can elect the economically more attractive program, providing flexibility to optimize credit economics as CCS lowers carbon intensity and final 45Z rules become clearer. One Earth remains the principal organic volume growth driver, with a phased path from approximately 150 million to 200 million gallons of annual capacity. The facility currently produces approximately 150 million gallons annually, with construction for the next capacity step progressing on schedule and additional production expected to come online before the end of 2026. The first operating milestone is approximately 175 million gallons, a roughly 17% increase from the current level. Following that step, additional EPA and Illinois EPA approvals are required before production can move toward approximately 200 million gallons, with production expected to approach that level around early to mid-2027. Reaching 200 million gallons would represent approximately 33% growth from the current One Earth base and would expand ethanol, co-product and eligible 45Z production while leveraging REX’s existing Corn Belt infrastructure and market access. Draft Class VI permits represent the most significant CCS regulatory milestone to date and materially reduce federal permitting uncertainty around the One Earth project. On August 17, the EPA issued draft Class VI permits for three injection wells with combined storage capacity of approximately 90 million tons, with the September presentation projecting final EPA permits in November 2026. Construction of the carbon capture and compression facility is substantially complete, with facility testing remaining. Cumulative investment in the ethanol expansion and CCS projects reached approximately $191.2 million at 2Q FY26-end, up from $176.3 million at 1Q-end and approximately $166 million at FY25-end. With the federal process materially advanced, the remaining project sequence centers on the approximately 5-mile connector pipeline, Illinois EPA approvals and local zoning requirements, with the pipeline approval appearing to be the principal milestone. Excess storage capacity creates meaningful third-party sequestration optionality and expands One Earth’s longer-term low-carbon fuel positioning. The project is designed to sequester approximately 560,000 tons of CO2 annually from One Earth following the expansion, compared with approximately 90 million tons of total storage capacity across the three wells. REX has secured consent from 100% of landowners for the pipeline route associated with Wells 1 and 2 and sufficient subsurface easements for Well 1 to sequester all One Earth emissions for approximately 15 years. The substantial excess capacity creates a potential fee-generating opportunity from third-party emitters, while lower-carbon ethanol could also support additional demand from sustainable aviation fuel markets. These opportunities remain longer-term, with REX currently focused on completing and permitting its own CCS project before pursuing third-party sequestration. Export growth and California E15 broaden the demand backdrop as One Earth prepares to add production capacity. U.S. ethanol exports increased approximately 13% during the first six months of 2026, with continued record export demand supporting industry fundamentals entering 3Q. California’s approval of E15 creates another meaningful demand channel, with management citing approximately 695 million gallons of potential consumption. Recent RIN exemption developments could pressure RIN economics, although management does not expect a major impact on ethanol sales given that the exemptions span both D4 and D6 credits and export demand remains strong. Together, sustained export growth and broader E15 adoption improve the industry’s ability to absorb incremental production as REX moves first toward 175 million gallons and subsequently approximately 200 million gallons at One Earth. Higher incentive compensation absorbed some operating leverage, while unconsolidated affiliates provided a materially larger earnings contribution. SG&A increased to $15.6 million from $6.2 million y/y, primarily reflecting higher incentive compensation tied to stronger results and restricted stock awards issued during the quarter. Equity in income of unconsolidated affiliates increased to $7.2 million from $0.9 million, benefiting from stronger industry conditions and production tax credit contributions at REX’s non-consolidated facilities. Interest and other income was broadly stable at $3.2 million versus $3.1 million y/y, reinforcing that the earnings improvement was primarily driven by operating performance, 45Z and stronger affiliate profitability. Liquidity and working capital strengthened despite higher project spending, reinforcing REX’s ability to fund One Earth and CCS internally. REX ended 2Q with $379.5 million of cash, cash equivalents and short-term investments, up from $364.3 million at the end of 1Q and $310.5 million a year earlier, while continuing to carry no bank debt. Working capital increased to $391.5 million from $376.2 million sequentially and $353.4 million y/y. First-half operating cash flow increased to $38.0 million from $12.8 million, while capital expenditures rose to $35.0 million from $28.9 million. REX currently expects to spend another $20 million to $30 million across its projects during the remainder of FY26, with all expenditures funded from available cash. The balance sheet therefore continued to strengthen even as cumulative One Earth and CCS spending reached $191.2 million, preserving flexibility for additional capital deployment as the projects move toward completion. Working-capital movements remained manageable, with higher receivables and prepaid assets offset by stable inventory and stronger cash generation. Accounts receivable increased to $23.5 million at July 31 from $14.7 million at FY25-end, while inventory was broadly stable at $29.0 million versus $28.4 million and accounts payable declined to $36.7 million from $38.4 million. During the first half, accounts receivable represented an $8.8 million use of operating cash and prepaid and other assets represented a $27.3 million use, while inventory absorbed only $0.6 million. Despite those uses, cash flow from operations increased nearly threefold to $38.0 million from $12.8 million, reflecting materially stronger earnings despite working-capital outflows. Capital allocation remains focused on completing organic growth projects, while repurchases and selective M&A retain strategic relevance. REX acquired approximately $1.6 million of treasury stock during 1H FY26 versus $33.4 million in the prior-year period, while first-half capital expenditures were $35.0 million and cumulative One Earth and CCS investment reached $191.2 million. Share repurchases have historically been a preferred method of distributing capital, and REX continues to evaluate acquisitions of ethanol plants and businesses in adjacent industries. With $379.5 million of cash and short-term investments, no bank debt and the major One Earth and CCS investments moving toward completion, the balance between additional organic investment, repurchases and selective acquisitions should become increasingly important to the equity story. Outlook remains constructive, with 3Q results expected to exceed the prior-year period as 45Z, exports and stronger core ethanol economics support the second-half setup. At this early stage of 3Q FY26, REX expects to remain profitable and anticipates results above the prior-year period, when diluted EPS was $0.71 on revenue of $175.6 million. First-half FY26 EPS reached $1.62 versus $0.47 y/y, while 45Z benefits totaled approximately $26.0 million and export demand remained strong. The One Earth expansion remains on track for construction completion by the end of 2026, with production expected to step toward approximately 175 million gallons, while the three draft Class VI permits represent another important step in advancing CCS. The medium-term setup remains tied to sustained crush economics, continued 45Z monetization, the One Earth ramp toward 175 million gallons followed by permitting toward approximately 200 million gallons, and completion of the remaining CCS approvals. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. Valuation remains reasonable following the step-up in earnings and improving visibility across One Earth, 45Z and CCS. At the September 3 close of $41.62, REX has a market capitalization of approximately $1.38 billion and enterprise value of ~$1.1 billion, and trades at 11.4x LTM EPS of $3.65, down from 16.6x at the end of the prior quarter and well below its three-year peak of 27.9x. We apply a 16x illustrative P/E multiple, representing an approximately 23% premium to the current profitable peer average of 13.0x, but still roughly 43% below REX’s three-year peak. We believe this modest premium to peers is supported by REX’s 24 consecutive profitable quarters, $379.5 million of liquidity, no bank debt, growing 45Z contribution, approaching One Earth capacity ramp and advancing CCS development, while the substantial discount to history appropriately reflects continued commodity, policy and permitting risk. Applying 16x to LTM EPS implies an illustrative value of approximately $58.4 per share. We note that cash, cash equivalents and short-term investments of $379.5 million equate to approximately $11.47 per share, or ~28% of the current share price, with REX continuing to carry no bank debt. Peer valuation provides a secondary cross-check, with REX trading below the profitable-peer average while maintaining substantial balance-sheet flexibility. GPRE trades at 8.9x LTM earnings, ALTO at 6.1x, ADM at 23.1x and VLO at 15.5x. The peer average is approximately 13.0x, placing REX’s 11.4x multiple at roughly a 12% discount. The discount remains notable given REX’s 24 consecutive profitable quarters, strong balance sheet and improving visibility across 45Z, One Earth and CCS. Further re-rating increasingly depends on execution across a visible set of catalysts. 45Z has already contributed approximately $26.0 million in 1H FY26, so the next drivers are whether those economics remain durable and improve as carbon intensity declines. Milestones include sustained core crush profitability and 45Z contribution, commissioning of One Earth toward approximately 175 million gallons and progression toward 200 million gallons, conversion of the draft Class VI permits into final approvals, advancement of the Illinois pipeline and environmental permitting processes, and disciplined deployment of $379.5 million of liquidity through organic growth, repurchases or selective acquisitions. Continued delivery across these areas would improve visibility into the durability and scale of REX’s earnings base as its low-carbon growth investments move closer to commercial operation. Read Exec Edge’s Initiation on REX Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post REX’s Record 2Q EPS, CCS Project Advances – Quarterly Update Report appeared first on ExecEdge.

On August 3, The Andersons Inc. (NASDAQ:ANDE) reported second-quarter results that dwarfed last year's numbers, with net income attributable to the company climbing to $57 million, or $1.65 per diluted share, from just $7.9 million, or $0.23 per share, a year earlier. Adjusted net income reached $74 million, or $2.15 per share, versus $8.4 million, or $0.24 per share, in the second quarter of 2025. The turnaround leaned almost entirely on one business: renewable fuels. Renewables did the heavy lifting. The segment posted a record second-quarter pretax income of $65 million, with the adjusted figure reaching $88 million, on record plant output and strong merchandising execution. Andersons credited its low-carbon strategy for $24 million in 45Z producer tax credits during the quarter, plus the first-quarter finalization of the Renewable Volume Obligations, which firmed up commodity markets and opened trading opportunities for the merchandising desk. Gains in distillers corn oil and RIN pricing also helped. Segment adjusted EBITDA came in at $103 million, more than triple the $30 million posted a year earlier. Agribusiness improved too, if more modestly, with pretax income of $20 million, both on a GAAP and adjusted basis, up from $17 million in the prior-year quarter. Fertilizer margins strengthened even as volumes fell, and merchandising benefited from higher commodity prices and early-quarter volatility. The company is pushing further into low-carbon fuels, preparing a debottlenecking project at its Clymers, Indiana ethanol plant and advancing a Class VI well permit to capture more 45Z value. A new soybean meal export operation at the Port of Houston is expected online in the fourth quarter. Operating cash flow of $488 million for the quarter, up from $299 million a year earlier, gave the company room to keep funding those projects while holding long-term debt to EBITDA below its 2.5-times target. The numbers come with caveats. Cash and cash equivalents stood at just $66.5 million at the end of the second quarter, down from $351 million a year earlier, even as short-term debt climbed to $314 million from $104 million. Much of that swing traces to working capital timing and investment spending rather than distress, but it leaves less cushion than the company carried a year ago. In Agribusiness, the fertilizer and merchandising gains were partly offset by fuel surcharges, a reminder that the segment's profitability still moves with input costs it does not control. Andersons also warned that a drier stretch across its western growing regions could weigh on grain-asset profits this fall, even though better conditions in the eastern corn belt cut the other way, and that grower economics could limit fertilizer purchasing heading into the fall application season. Renewables' strength, meanwhile, leans heavily on policy. The 45Z credits and the boost from the Renewable Volume Obligation finalization are both tied to federal rules that can shift, and this quarter's 20% effective tax rate was itself a function of non-taxable 45Z income. A full-year adjusted tax rate guided to 14% to 18% assumes those credits keep flowing. If the underlying policy framework moves, the segment's margin profile would look very different. Hedge fund ownership of The Andersons ticked up to 31 funds in the most recent quarter from 29 the quarter before, a modest sign of accumulating conviction. Short interest sits at 4.12% of float, pointing to a limited but real pocket of skepticism rather than a stock under siege. As of September 2, the shares trade at a forward P/E of 20.92, a multiple that assumes the Renewables-driven earnings jump has some staying power. That combination suggests that the market has largely bought into the turnaround already. The Andersons enters the second half of 2026 with Renewables doing the heavy lifting and Agribusiness adding a smaller, steadier contribution. The bull case rests on 45Z credits, RVO tailwinds, and export growth continuing to compound, plus new capacity at Clymers and Houston coming online as planned. The bear case rests on how much of that strength is policy-dependent and how thin the cash cushion has become relative to a year ago. While we acknowledge the potential of ANDE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:30 a.m. ET Vice President, Corporate Controller and Investor Relations - Michael Hoelter President and Chief Executive Officer - William Krueger Executive Vice President and Chief Financial Officer - Brian Valentine Operator: Good morning, ladies and gentlemen. Welcome to the Andersons 2026 Second Quarter Earnings Conference Call. My name is Allison, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. I will now hand the presentation over to your host for today, Mr. Mike Hoelter, Vice President, Corporate Controller and Investor Relations. Please proceed. Michael Hoelter: Good morning, everyone, and thank you for joining us for The Andersons Second Quarter Earnings Call. We have provided a slide presentation that will enhance today's discussion. If you are viewing this presentation via the webcast, the slides and commentary will be in sync. This webcast is being recorded, and the recording and the supporting slides will be made available on the Investors page of our website shortly. Please direct your attention to the disclosure statement on Slide 2 as well as the disclaimers in the press release related to forward-looking statements. Certain information discussed today constitutes forward-looking statements that reflect the company's current views with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors, which are described in the company's reports on file with the SEC. We encourage you to review these factors. This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP measures are included within the appendix of this presentation. On the call with me today are Bill Krueger, President and Chief Executive Officer; and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Bill. William Krueger: Thanks, Mike. Good morning, everyone, and thank you for joining our call to discuss our second quarter results and outlook. I'd like to start off by thanking our entire team for their hard work and focus during an unpredictable first half of 2026. We are proud of the results our teams are generating for our shareholders and their commitment to delivering for our customers during a time of rapid change. Our second quarter results were led by record earnings in renewables. Agribusiness had year-over-year improvement as our fertilizer business performed above expectations. Adjusted earnings per share of $2.15 and adjusted EBITDA of $140 million for the quarter compares favorably to some of our best historical quarters and reflects our commitment to the strategy we presented at our Investor Day to deliver long-term shareholder value. As an industry, we need to continue to build North American demand for grains, grain products and oilseeds. With the RVO finalized earlier in the year and the recent release of the updated 45ZCF GREET model, substantial progress has been made to increase domestic demand for U.S. corn and soybeans. These actions support the U.S. farmer and enhance both of our business segments moving forward. Renewables quarterly results were driven by record ethanol production and higher margins. Our renewables trading desks also improved significantly across all products that we merchandise due to the increased demand. With some volatility back in the grain markets, we have established a larger forward book of purchases versus last year. Our fertilizer results came from improved operating efficiency, continued integration into the Agribusiness segment and focused risk management during their primary application season. Our current long-term growth capital remain on track. And later during the outlook, I will discuss them in a little more detail. With that overview, I'll turn the call over to Brian to discuss our financial results. I will be back to discuss the outlook for the rest of 2026 after his update. Brian Valentine: Thanks, Bill, and good morning, everyone. We're now turning to our second quarter results on Slide #5. In the second quarter of 2026, the company reported net income attributable to -- The Andersons of $57 million or $1.65 per diluted share and adjusted net income of $74 million or $2.15 per diluted share. This compares to adjusted net income of $8 million or $0.24 per diluted share in the second quarter of 2025. Gross profit increased over 40% as fundamentals in both groups were improved over the second quarter of 2025. Adjusted pretax earnings were $93 million compared to $15 million in 2025, with most of the improvement coming from renewables. Adjusted EBITDA for the second quarter was $140 million compared to $65 million in 2025. Our effective tax rate varies each quarter based primarily on tax credits earned and the amount of income or loss attributable to noncontrolling interests. We recorded taxes at an effective rate of 20% for the second quarter and expect our full year adjusted effective tax rate to be in the range of 14% to 18%. Next, we'll move to Slide 6 to discuss cash, liquidity and debt. We generated cash flow from operations before changes in working capital of $113 million in the second quarter of 2026 compared to $43 million in 2025, with the increase being driven by our strong earnings this quarter. Our short-term borrowings are up compared to the prior year as we have seen increased market volatility in 2026. Our readily marketable grain inventories continue to be well in excess of our short-term debt, which is consistently the case throughout the ag cycle. Next, we'll take a look at capital spending and long-term debt on Slide 7. Second quarter capital spending totaled $76 million compared to $49 million in 2025, which includes the funding of previously announced long-term growth projects as well as normal maintenance capital. We continue to take a disciplined, responsible approach to capital spending, which we expect will be approximately $225 million for the year, excluding acquisitions. Our long-term debt-to-EBITDA is 1.3x, which remains well below our stated target of less than 2.5x. We continue to evaluate various acquisitions and organic growth projects and have a strong balance sheet that will support investments that meet our strategic and financial criteria. Now we'll move on to a review of each of our business segments, beginning with Agribusiness on Slide 8. The Agribusiness segment reported adjusted pretax income attributable of $20 million compared to $17 million in the second quarter of 2025. Our fertilizer business had a strong application season with improved margins and operational efficiencies. We saw higher commodity prices and volatility during the quarter, which provided more opportunities for our merchandising businesses. However, in these market conditions, our asset footprint experienced limited space income. Our premium ingredients business continues to operate well. Agribusiness had adjusted EBITDA of $53 million for the second quarter compared to $46 million last year. Moving to Slide 9. Renewables had another outstanding quarter, generating adjusted pretax income of $88 million compared to pretax income attributable of $10 million in the second quarter of 2025. Our ethanol plants continue to perform well with efficient operations resulting in record second quarter production. Ethanol margins were up significantly year-over-year on strong domestic and export demand as well as higher co-product values. We recorded $24 million of 45Z tax credits in the quarter. Our merchandising businesses performed well as corn oil prices and volumes improved over the prior year. Renewables had adjusted EBITDA of $103 million in the second quarter compared to $30 million last year. And with that, I'll turn things back over to Bill for some comments about our outlook. William Krueger: Thanks, Brian. As we look forward to the remainder of 2026, the market has more variables than usual when combining geopolitical tension, biofuels and farm bill policy and weather events. Our diversified portfolio should support our base business and the current environment should provide more merchandising potential. We are evaluating several opportunities for long-term growth focused on increasing shareholder value. At the same time, we are making investments to increase productivity and efficiency across the enterprise while also ensuring that we keep our employees safe. In Agribusiness, we are just finishing wheat harvest. And while the overall crop was smaller, we are pleased with the ownership we accumulated. We expect increased demand later in the year for our ownership due to the geographic dispersion of harvested bushels for both hard and soft wheat. Current corn and soybean crop conditions are generally comparable to last year in our key regions. We are currently in a weather market as the U.S. is experiencing above normal temperatures with reduced rainfall across much of the Western corn belt. Our investments in premium ingredients, including those used in food and pet food manufacturing continue to deliver profitable growth. While significant corn acreage should support demand for all fertilizer applications, farm gate pricing may have an impact on purchasing decisions. We will continue to monitor global fertilizer supply issues. And while we were well positioned for spring planting, ongoing tensions in the Middle East will continue to influence Agribusiness dynamics. In renewables, we expect increased production to continue throughout the biofuels industry. Ethanol exports are expected to remain strong, but we have seen some recent competition from Brazil. Elevated global fuel prices continue to enhance ethanol's appeal. We remain hopeful that year-round E15 will be passed this year. However, voluntary blend rate increases are already occurring based on the comparative economics of ethanol versus gasoline. Our renewables merchandising teams expect to see continued opportunities with increases in bio-based diesel production. Our 4 ethanol plants are all operating well, and our recent capital expenditures are providing increased efficiency and higher volumes. We are closely monitoring board crush margins with increased volatility in corn futures and U.S. ethanol currently priced near parity with Brazil. Switching to growth. We have initiated several projects aimed at reducing the carbon intensity of the ethanol we produce and increasing production levels. As previously stated, all our plants are benefiting from higher tax credits this year. The Class VI well permit for our Clymers, Indiana facility continues to progress through regulatory review. And once approved and operational, this initiative will further reduce the carbon intensity score of our ethanol, enabling additional tax credit generation. We are evaluating several projects for each of our plants with the same goals. We have completed the grain elevator upgrades at Houston, leaving only our soybean meal export portion of this Agribusiness project to be completed. We expect this to be fully operational in the fourth quarter. Other recent growth investments within Agribusiness have come online as we continue to optimize performance levels. We remain focused on achieving our long-range run rate EPS target of $7 per share by the end of 2028. Recent favorable market conditions and strong execution demonstrate our ability to exceed $6 per share for the trailing 12 months. The successful completion of remaining key growth projects, solid market conditions and sustained operational excellence should position us to achieve this target. We remain aligned and focused on providing extraordinary service to our customers and increasing the value of -- The Andersons. We are happy to take your questions at this time. Operator: [Operator Instructions] Our first question today will come from Ben Klieve of -- The Benchmark Company. Benjamin Klieve: First, I want to isolate the fertilizer business here with a couple of questions. One, I'm wondering if you can discuss the relative seasonality in the first half of the year between the first quarter and the second quarter. Was it kind of in line with expectations and consistent year-over-year? Or did it skew one way or the other? And then second, wondering if you guys can give us a sense of the degree to which the elevated pricing in the fertilizer complex drove excess profitability within the second quarter, especially? William Krueger: Ben I may need a little clarity on the second question. But to your first question, how applications went this year, we were skewed a little bit more towards the first quarter than the second quarter. And as I'm sure you're well aware of, we did see a drop of fertilizer prices domestically towards the end of the second quarter. But all in all, it was pretty much as expected coming into the year for fertilizer results. And if you could help me out with the second question again, just to make sure I give you the right answer. Benjamin Klieve: Yes, Bill. So just trying to understand the degree to which the variable and elevated pricing throughout the fertilizer complex drove excess profitability within the second quarter for the fertilizer product specifically? William Krueger: Okay. Yes, I would tell you, it was probably twofold on that. The first one was the efficiencies that we were able to realize really throughout the first half of the year, combined with solid management, continued integration into the Agribusiness really drove a little bit higher margin and execution. And then the other item that we really saw was the ability to be able to place the amount of volumes that we needed and had planned for at each of our locations. The team did a very good job on that. Benjamin Klieve: Great. That's very helpful. I want to turn to within the Agribusiness segment, the results out of the Western belt and kind of the Skyland assets specifically. It looks like there's some kind of moving pieces here. Wondering if you can just kind of level set us with expectations for that business here for this year and kind of talk about the puts and takes that you guys are seeing right now versus expectations going into the year? William Krueger: Sure. The Skyland region is one of the driest regions in the Western Corn Belt. It really did minimize the volume of hard wheat produced. If you look at Kansas as an overall state is one of the lowest years we've had in recent history. The Skyland assets were not immune to that. we do need some rain in really most of the Western Corn Belt, and that will really make the determination. In terms of execution and efficiency, Skyland was one of the areas where we were able to grow our forward book, as I mentioned in my opening comments. So we're really proud of that factor and indicates that some of the improved management that we've put into the organization is really executing. In order to talk about the balance of the year, it's really going to be weather-driven. Now as you remember, when we talked about Skyland early on, one of the real benefits that we see is the understanding of that asset footprint combined with our merchandising opportunities. So if we continue to see dryness and potentially a smaller feed grains crop in the West, that should provide us with more merchandising opportunities than we've been able to see over the last couple of years, specifically in the Western Corn Belt. Operator: Your next question today will come from Derrick Whitfield of Texas Capital. Derrick Whitfield: Starting first with your comments on supportive ethanol fundamentals. With the tightness in product markets that both the majors and the largest U.S. refiners are highlighting, where do you see U.S. and global ethanol blend rates headed given that product tightness will likely carry well into 2027 even if we return to normal trade in 3Q? William Krueger: Derrick, this is Bill. Today, it feels like our blending rates are going to continue to trend higher. From 2024 to 2025, our blend rate gained 14 basis points, finishing 2025 at a 10.51%. As we look at the market today, domestically, our expectations are that, that will be the same type of increase, if not slightly more. So we feel like we're going to continue to increase the blend rates at kind of the same rates that we've seen over the last couple of years with likely an increasing rate, as I mentioned in my comments, through the voluntary blending. Derrick Whitfield: Great. And then as my follow-up, Bill, in your outlook remarks, you noted that you're evaluating other CI reducing projects at your other plants outside of Clymers. Could you perhaps elaborate on some of the projects you're contemplating? William Krueger: Yes. Derrick, but publicly, until we announce them, we're not going to talk about other projects that we're considering until we actually execute on them. Derrick Whitfield: Fair enough. Maybe just one on Clymers because you did comment on that. With that CO2 injection well permit progressing, are you definitely in a parallel fashion evaluating or building a third-party market for incremental volumes? William Krueger: Yes. We believe that the demand for -- I assume when you say third-party markets, you're talking about the additional ethanol that we will produce. Derrick Whitfield: Correct. William Krueger: Yes. We believe that the demand base for really all 3 of our Eastern plants will allow us to grow -- continue to grow our production as we have the last several years. And specifically to Clymers, we believe that, that market can take even more than what we've announced that we're going to produce. Operator: The next question today will come from Ben Mayhew of BMO. Benjamin Mayhew: Congratulations, guys on hitting the $6 run rate mark. My first question has to do with ethanol. So I'm just wondering, as we carry over from the really just very strong performance in 2Q to 3Q, paper margins have shown some sequential weakness. But I'd imagine you would be capturing more 45Z in 3Q versus 2Q given some of your maintenance that you went through in 2Q. So I was just hoping if you could touch on the durability of ethanol margins sequentially? And just how you're thinking about the cadence from 2Q to 3Q on a pretax income basis? William Krueger: Yes. I'll let Brian address the 45Z comment or question that you had. As a reminder, Q3, we did have 2 of the months, we had 100% ownership in 2025. So I'll let Brian address the exact numbers there. But in terms of how Q3 is laying out versus Q2, you are correct that we have seen a little bit of a drop in board crush -- we also believe that there might be a potential for increased corn prices, which will drive the value of our DDG co-products up, along with continued opportunities for our DCO pricing to increase along with the demand that we're seeing in renewable diesel. So from our perspective, there's a lot of variables still to play out, but we feel very confident in Q3 as a comparative to potentially Q2 and even looking back at Q3 of 2025, which was a very strong quarter for us. Brian Valentine: And I think, Ben, to your question on the 45Z, I mean, you're correct, we had our spring maintenance. In reality, though, we likely will have some fall maintenance right toward the end of the third quarter. So the 45Z, we still expect to be in that $90 million to $100 million range for the year. You saw it was $24 million in the second quarter. That number shouldn't move by more than a couple of million dollars per quarter with probably Q2 and Q3 being just slightly lower and then Q1 and Q4 being a little bit higher. Benjamin Mayhew: Great. That's very helpful. Sticking to ethanol or just biofuels in general, there's been a lot of talk over the past week or 2 about the small refinery exemptions and the risk that they might have depending on the size of the final approved amount, the risk that they might have on the overall RVO. Just wondering if you have any thoughts around that? And do you think this is a real material risk? Or is it just something the administration is looking to do to make everyone happy and whole as much as they can? William Krueger: I don't think it's prudent for us to speculate on what the EPA or the administration is currently thinking on SREs. As The Andersons, we've stated previously that we think small refineries should only have exemptions granted when they can demonstrate that the RFS is creating economic stress on their company. How the EPA chooses to do that is their decision. I do applaud them for their announcement yesterday. And the continued expediting of this entire process, I think the EPA is doing a very good job. From our perspective, as we look at it today, we do not see the end result being material to The Andersons and our ability to generate the types of numbers that we've talked about historically. Operator: Our next question today will come from Pooran Sharma of Stephens. Jack Hardin: This is Jack Hardin on for Pooran. Just on the outlook, Agribusiness was modestly better than expected, but the larger upside came from renewables. Over the next 12 months to 18 months, where do you see the greater incremental earnings opportunity, a broader recovery in grain asset earnings or sustained strength in the renewable platform? Brian Valentine: Let's start on the renewable side of the question that you asked. We believe that we have a very focused strategy in continuing to invest in our plants. We have projects that are underway that we haven't discussed publicly. We have the ability to continue to look at additional opportunities. We've been very clear over the last 2 years that we do have a desire as long as the price is correct, that we would like to add more gallons to our fleet. That being said, there's a lot of dynamics right now in Agribusiness that are really going to set the table for the next 12 months to 18 months, as you asked. We have a large corn crop that's being produced right now. We have some weather challenges. We have more weather challenges in the Western Corn Belt. We have a larger footprint in the Eastern Corn Belt when you include all of our grain assets and our ethanol plants, which are a lot of our origination. So to look out forward, you're going to have to talk about the geopolitical tensions, how they're going to play out and then both North America and South American production. As we've stated, we do believe, again, knowing what we know today that the trough for the ag market was likely set in 2025. That can change for a lot of reasons. But as we look forward, we think the increase in North American demand that I talked about in my opening comments are going to drive a little bit of a rebound. The question is just how far and how fast will that rebound occur. So we feel pretty confident in both of our business segments today over the next 12 months to 18 months with both the tailwinds that we have in renewables and our focus on efficiency and running our assets to the best of their abilities, along with being able to grab merchandising opportunities when they arise. Operator: [Operator Instructions] And our next question will come from Jason Miner of Bloomberg. Jason Miner: Just a little bigger picture. If oil were to get much cheaper for some reason, what are the different puts and takes across the whole portfolio that you might see? I mean I think we could all guess that blending economics might be more challenged, but you still have the feedstock treating business we haven't talked too much about. And I think there might be some other effects hidden in there. William Krueger: The oil complex is one that often, people may think that it has a more material value on The Andersons than it really does. But from our perspective, let's talk with fuel surcharges. Our Agribusiness improved year-over-year with substantial fuel surcharges that we incurred. So likely, if fuel were to drop substantially, as you suggested, I would envision fuel surcharges going away. We do believe that there is a potential that natural gas prices could be reduced in the second half of the year. We do understand that the gasoline price would go down with oil. But the blending economics today with where corn is at and where ethanol is priced is still very attractive. And not just in the U.S., but as we look globally, we continue to see countries continue to drive towards higher blend rates, which will support U.S. exports. So from The Andersons overall, I don't see it being a material effect. The size and condition and geographic dispersion of the corn and soybean crop will be substantially more, including the ability for us now to bring cattle back in from Mexico to rebuild our feed lots -- that to us is a much larger variable than the crude market going back into the 60s or whatever you would define as a substantial drop. Jason Miner: That's very helpful. One other one then. So you have some capacity coming on in the fourth quarter, which looks pretty well timed. Meal demand growth has been very good. Just wondering how you feel about the outlook for meal demand growth in some of the target markets for that new export capacity. William Krueger: We are very excited about the Houston project. We got delayed slightly due to mother nature and the heavy rains in Houston that we witnessed. But the team down there has done a great job of working through it. We believe that the opportunity to increase our overall Agribusiness results, utilizing Houston as both a grain and a soybean meal export terminal will pay us dividends. Where we're going to go with that soybean meal today, we would rather not disclose publicly. But I can assure you that we have been working for the better part of 9 months with destination consumers of soybean meal and feel very confident that we will have the size of book we need to execute in Houston. Operator: This will conclude our question-and-answer session. And at this time, I'd like to turn the conference back over to Mike Hoelter for any closing remarks. Michael Hoelter: Thanks, Allison. We want to thank you all for joining us this morning. Our next earnings conference call is scheduled for Wednesday, November 4, 2026, at 8:30 a.m. Eastern Time when we will review our third quarter results. As always, thank you for your interest in -- The Andersons, and we look forward to speaking with you again soon. Operator: The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines. Before you buy stock in Andersons, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Andersons wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 10, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Andersons (ANDE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

The Andersons, Inc. recently reported second-quarter 2026 results showing sales of US$3,097.66 million and net income of US$56.56 million, with basic earnings per share from continuing operations rising to US$1.66 from US$0.23 a year earlier. A key insight is that record ethanol production and higher margins in the Renewables segment, alongside stronger fertilizer operations, powered this sharp earnings improvement and underpinned management’s confidence in its long-term profit targets. Next, we’ll examine how the record Renewables performance and improved fertilizer results shape Andersons’ investment narrative in light of these earnings. Outshine the giants: these 16 early-stage AI stocks could fund your retirement. To own Andersons today, you have to believe the company can turn a historically low-margin, asset-heavy agribusiness into a consistently profitable platform built around Renewables and higher-return specialty fertilizer. The latest quarter reinforces that narrative: record ethanol production, stronger margins and better fertilizer execution translated into sharply higher earnings even as sales were broadly flat. That kind of operating leverage strengthens management’s case for its long-term EPS ambitions and could keep investor attention on further renewables projects, 45Z tax credit realization and disciplined capital spending as near-term catalysts. At the same time, the share price has already rerated strongly over the past year, and the balance sheet still carries a high level of debt, so any reversal in ethanol demand or fertilizer margins could quickly refocus the market on risk rather than growth. But investors should also recognise how quickly earnings could react if ethanol conditions soften. Despite retreating, Andersons' shares might still be trading above their fair value and there could be some more downside. Discover how much. Two Simply Wall St Community fair value estimates span from US$88.33 to a very large US$582.26, underscoring how different your assumptions can be. Set those wide views against the recent earnings surge tied to ethanol and fertilizer and it becomes clear why understanding both upside drivers and balance sheet risk really matters for how Andersons might perform. Explore 2 other fair value estimates on Andersons - why the stock might be worth just $88.33! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Andersons research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision. Our free Andersons research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Andersons' overall financial health at a glance. Every day counts. These free picks are already gaining attention. See them before the crowd does: Uncover the next big thing with 19 elite penny stocks that balance risk and reward. Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. Rare earth metals are the new gold rush. Find out which 28 stocks are leading the charge. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ANDE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Andersons (ANDE) drew fresh attention after reporting much stronger Q2 2026 earnings, with record results in its Renewables segment and improved fertilizer performance supporting interest in the stock and its current positioning. See our latest analysis for Andersons. The stronger Q2 update has coincided with a sharp re-rating in Andersons, with the share price up 6.61% on the day of the release and a 40.40% year to date share price return. The 1-year total shareholder return of 118.19% shows momentum has been building over a longer period. If Andersons' performance has you rethinking where opportunities might sit in the market, this is a useful moment to broaden your search and check out 19 top founder-led companies Andersons now has earnings that look much stronger and a share price that has raced ahead. The key issue is whether that recent re-rating still leaves room for value or whether it already fully reflects the story. The most followed narrative currently places Andersons' fair value at $80, compared with the last close at $74.48. This implies modest undervaluation and raises questions about what is priced in. Read the complete narrative. Want to see what sits behind that fair value for Andersons? The narrative focuses on faster top line expansion, better margins, and a lower future earnings multiple. It also highlights which assumptions carry the most weight. Result: Fair Value of $80 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, investors in Andersons still need to weigh the exposure to volatile ethanol and grain markets, along with higher capital spending and debt that could pressure future cash flows. Find out about the key risks to this Andersons narrative. With Andersons attracting both optimism and concern, this is a moment to move quickly, review the data in detail, and weigh the 4 key rewards and 2 important warning signs. If Andersons has sharpened your focus on opportunities, do not stop here. Use the Simply Wall Street Screener to uncover fresh ideas that fit your style. Spot potential bargains early and compare them with Andersons by scanning screener containing 18 high quality undiscovered gems that many investors may not be watching yet. Strengthen your income stream and stress test it against Andersons by reviewing 7 dividend fortresses that aim to pair yield with resilience. Dial down portfolio risk and complement your position in Andersons by focusing on 82 resilient stocks with low risk scores that score well on financial stability. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ANDE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in The Andersons, Inc.? Here are five stocks we like better. Andersons reported sharply higher Q2 earnings: Adjusted net income rose to $74 million, or $2.15 per share, from $8 million a year earlier, while adjusted EBITDA increased to $140 million from $65 million. Renewables was the primary growth driver, delivering record results on higher ethanol margins, production volumes, demand and co-product values, along with $24 million in 45Z tax credits. Management expects $90 million to $100 million in 45Z credits for 2026. The company maintained its 2026 capital-spending outlook of approximately $225 million and remains focused on achieving its $7 run-rate EPS target by the end of 2028, supported by growth projects, operational improvements and a strong balance sheet. 6 best ethanol stocks to buy now Andersons (NASDAQ:ANDE) reported sharply higher second-quarter earnings as record performance in its Renewables segment and improved fertilizer operations lifted results during what management described as an unpredictable first half of 2026. The company posted net income attributable to The Andersons of $57 million, or $1.65 per diluted share, for the second quarter. Adjusted net income was $74 million, or $2.15 per diluted share, compared with $8 million, or $0.24 per diluted share, a year earlier. Adjusted EBITDA rose to $140 million from $65 million in the 2025 quarter, while adjusted pre-tax earnings increased to $93 million from $15 million. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Try These 2 Stocks to Play the Wheat Rally “Our second quarter results were led by record earnings in Renewables,” President and Chief Executive Officer Bill Krueger said. He added that Agribusiness improved year over year as the fertilizer business performed above expectations. The Renewables segment generated adjusted pre-tax income of $88 million, compared with $10 million in pre-tax income attributable during the second quarter of 2025. Adjusted EBITDA for the segment rose to $103 million from $30 million. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? United Natural Foods’ Risk-Reward Tradeoff Looks Appetizing Chief Financial Officer Brian Valentine said the company’s ethanol plants produced a record second-quarter volume, supported by efficient operations. Ethanol margins increased significantly from the prior year amid strong domestic and export demand and higher co-product values. The company recorded $24 million of 45Z tax credits during the quarter. Krueger said Renewables trading desks also improved across products as demand increased, while corn oil prices and volumes strengthened year over year. He said the company expects industrywide biofuel production to continue rising, with ethanol exports expected to remain strong despite recent competition from Brazil. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Management said voluntary ethanol blend-rate increases are occurring because of ethanol’s economics relative to gasoline. Krueger said U.S. blend rates rose 14 basis points from 2024 to 2025, ending 2025 at 10.51%, and he expects a similar or slightly larger increase this year. Looking into the third quarter, Krueger acknowledged that board crush margins have weakened somewhat from the second quarter. However, he said potential increases in corn prices could raise the value of distillers grains co-products, while demand tied to renewable diesel could support distillers corn oil pricing. He said the company remains confident in the third quarter relative to both the second quarter and the strong third quarter of 2025. Valentine said the company continues to expect $90 million to $100 million in 45Z credits for the full year. Quarterly credit amounts are expected to vary by only a few million dollars, with the second and third quarters slightly lower than the first and fourth quarters because of maintenance schedules. Agribusiness reported adjusted pre-tax income attributable of $20 million, up from $17 million in the prior-year quarter. Segment adjusted EBITDA rose to $53 million from $46 million. Valentine said fertilizer operations benefited from a strong application season, better margins and operational efficiencies. Higher commodity prices and increased volatility also created more merchandising opportunities, although the company’s asset footprint generated limited space income under those market conditions. Its premium ingredients business continued to operate well, he said. Krueger said fertilizer applications were somewhat more weighted toward the first quarter than the second quarter. Domestic fertilizer prices declined toward the end of the second quarter, but results were largely in line with management’s expectations entering the year. He attributed fertilizer profitability to operating efficiencies, continued integration into Agribusiness, risk management and the company’s ability to place planned volumes across its locations. Looking ahead, management said significant corn acreage could support fall fertilizer demand, though farm-gate pricing may affect customers’ purchasing decisions. The company is also monitoring global supply conditions and Middle East tensions. Wheat harvest is nearing completion, and Krueger said the company was pleased with the grain ownership it accumulated despite a smaller overall crop. He expects demand for that ownership to increase later in the year because harvested hard and soft wheat bushels are geographically dispersed. Conditions for corn and soybeans in the company’s key regions are generally comparable to last year, management said, though above-normal temperatures and reduced rainfall in much of the Western Corn Belt have created a weather-driven market. Krueger noted that dry conditions have reduced hard wheat production in the Skyland region and Kansas, while potentially creating future merchandising opportunities if feed-grain supplies in the West are smaller. Cash flow from operations before changes in working capital reached $113 million in the second quarter, compared with $43 million a year earlier, driven by stronger earnings. Capital spending totaled $76 million, up from $49 million in the prior-year period, including spending on growth initiatives and maintenance projects. The company expects approximately $225 million in capital expenditures for 2026, excluding acquisitions. Its long-term debt-to-EBITDA ratio stood at 1.3 times, below its stated target of less than 2.5 times. Management said it continues to evaluate acquisitions and organic projects that meet its strategic and financial requirements. Krueger said the company is pursuing investments intended to lower the carbon intensity of ethanol production and increase output. The Class VI well permit for the Clymers, Indiana, facility remains under regulatory review. Once approved and operating, management expects the project to further reduce the ethanol carbon-intensity score and generate additional tax credits. Krueger said the company is evaluating similar objectives at each of its plants but did not provide details on unannounced projects. In Agribusiness, grain-elevator upgrades at the company’s Houston facility have been completed. The remaining soybean meal export portion of the project is expected to become fully operational in the fourth quarter. Krueger said management has spent about nine months working with destination consumers and expects to have sufficient soybean meal business to support the Houston operation. Krueger said The Andersons remains focused on reaching its long-range run-rate earnings-per-share target of $7 by the end of 2028. Favorable market conditions and execution have enabled the company to exceed $6 per share on a trailing-12-month basis, he said. “The successful completion of remaining key growth projects, solid market conditions, and sustained operational excellence should position us to achieve this target,” Krueger said. The Andersons, Inc operates as a diversified agriculture company offering a broad range of products and services to farmers, retailers and industrial customers. Through its Grain Group, the company purchases, stores, merchandises and transports corn, soybeans and other commodities, while its Renewables Group produces ethanol and distillers grains at multiple plants in the U.S. The Rail Group provides locomotive leasing, railcar repair and related maintenance services, and the Horticulture Group supplies turf, specialty and horticultural products to landscaping professionals and consumer lawn and garden retailers. Founded in 1947 and headquartered in Maumee, Ohio, The Andersons has grown from a regional grain elevator operator into an integrated agribusiness platform. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Andersons Q2 Earnings Call Highlights" was originally published by MarketBeat. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record renewables earnings were driven by peak ethanol production levels and significantly higher margins resulting from strong domestic and export demand. Agribusiness performance improved year-over-year as the fertilizer business exceeded expectations through operational efficiencies and successful risk management during the application season. Management attributes the strong quarter to a commitment to the long-term strategy of building North American demand for grains and oilseeds, supported by finalized RVOs and updated carbon models. Renewables trading desks saw significant improvement across all merchandised products due to increased demand. The company has established a larger forward book of purchases compared to the prior year to capitalize on returning volatility in the grain markets. Strategic integration of fertilizer operations into the broader Agribusiness segment has enhanced margin execution and volume placement capabilities. Management reaffirmed its long-range run rate EPS target of $7 per share by the end of 2028, citing trailing 12-month performance already exceeding $6 per share. Capital spending for 2026 is projected at approximately $225 million, focused on high-return growth projects and productivity enhancements. While the grain elevator upgrades at Houston are already complete, the soybean meal export portion of the project is expected to be fully operational in the fourth quarter of 2026., targeting specific destination consumers. Future earnings growth is expected to be supported by carbon intensity reduction projects, including the pending Class VI well permit at the Clymers facility. Guidance for 45Z tax credits remains in the range of $90 million to $100 million for the full year, with slight quarterly fluctuations due to maintenance schedules. Geopolitical tensions in the Middle East and ongoing weather events in the Western Corn Belt are identified as primary variables impacting Agribusiness dynamics. The Skyland assets faced volume challenges due to one of the lowest hard wheat production years in recent history for the Kansas region. Management noted that while ethanol exports remain strong, recent competition from Brazil has emerged as a factor to monitor. The company maintains a strong balance sheet with a long-term debt-to-EBITDA ratio of 1.3x, well below the 2.5x target, providing flexibility for M&A. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Seasonality skewed more toward the first quarter than the second, though results remained in line with annual expectations. Profitability was driven by internal efficiencies and the ability to place planned volumes rather than just elevated market pricing. Management expressed confidence in Q3 margins despite some board crush weakness, citing potential offsets from higher co-product values like DDGs and corn oil. The 45Z credits are expected to be slightly lower in Q2 and Q3 due to maintenance, with higher captures in Q1 and Q4. The project was slightly delayed by heavy rains but is on track for Q4 completion. Management has been working for nine months with destination consumers to secure a book of business for soybean meal exports. Management stated that oil prices are less material than crop size and geographic dispersion. Lower oil might reduce fuel surcharges and natural gas costs, while ethanol blending remains attractive at current corn price levels.

This article first appeared on GuruFocus. Adjusted EPS: $2.15 per diluted share for Q2 2026, compared to $0.24 in Q2 2025. Net Income: $57 million, or $1.65 per diluted share, for Q2 2026. Adjusted Net Income: $74 million for Q2 2026. Adjusted EBITDA: $140 million for Q2 2026, compared to $65 million in Q2 2025. Gross Profit: Increased over 40% year-over-year. Adjusted Pre-tax Earnings: $93 million for Q2 2026, compared to $15 million in Q2 2025. Cash Flow from Operations (before working capital changes): $113 million in Q2 2026, compared to $43 million in Q2 2025. Capital Spending: $76 million in Q2 2026, compared to $49 million in Q2 2025; full-year expectation of approximately $225 million. Long-term Debt to EBITDA: 1.3 times. Agribusiness Adjusted Pre-tax Income: $20 million for Q2 2026, compared to $17 million in Q2 2025. Agribusiness Adjusted EBITDA: $53 million for Q2 2026, compared to $46 million in Q2 2025. Renewables Adjusted Pre-tax Income: $88 million for Q2 2026, compared to $10 million in Q2 2025. Renewables Adjusted EBITDA: $103 million for Q2 2026, compared to $30 million in Q2 2025. 45Z Tax Credits: $24 million recorded in Q2 2026. Effective Tax Rate: 20% for Q2 2026; full-year adjusted rate expected in the range of 14% to 18%. Warning! GuruFocus has detected 4 Warning Sign with ANDE. Is ANDE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record earnings in renewables driven by record ethanol production and higher margins. Adjusted EPS of $2.15 and adjusted EBITDA of $140 million, among the best historical quarters. Fertilizer business performed above expectations with improved margins and operational efficiencies. Strong balance sheet with long-term debt to EBITDA at 1.3 times, well below the 2.5 times target. Progress on growth projects, including Houston grain elevator upgrades and Clymers CO2 well permit, supporting future earnings. Agribusiness asset footprint experienced limited space income due to higher commodity prices and volatility. Weather challenges, including dryness in the Western Corn Belt, could impact crop yields and volumes. Ethanol margins have shown sequential weakness in Q3, with potential for increased corn prices. Geopolitical tensions, particularly in the Middle East, continue to influence agribusiness dynamics and fertilizer supply. Small refinery exemptions (SREs) pose a potential risk to the RFS, though not seen as material currently. Q: Congratulations on hitting the $6 run rate mark. As we carry over from the very strong performance in 2Q to 3Q, paper margins have shown some sequential weakness, but I'd imagine you would be capturing more 45Z in 3Q versus 2Q, given some of your maintenance in 2Q. Could you touch on the durability of ethanol margins sequentially and how you're thinking about the cadence from 2Q to 3Q on a pre-tax income basis? A: (William Krueger, President and CEO) We have seen a slight drop in board crush, but we believe there is potential for increased corn prices, which will drive up the value of our DDG co-products, along with continued opportunities for DCO pricing to increase with renewable diesel demand. We feel very confident in Q3 as a comparative to Q2 and even looking back at Q3 of 2025, which was a very strong quarter. (Brian Valentine, CFO) On 45Z, we had spring maintenance and will likely have some fall maintenance toward the end of Q3. We still expect 45Z to be in the $90 million to $100 million range for the year. The $24 million in Q2 shouldn't move by more than a couple of million dollars per quarter, with Q2 and Q3 being slightly lower and Q1 and Q4 a little bit higher. Q: There's been a lot of talk about small refinery exemptions (SREs) and the risk they might have on the overall RVO. Do you think this is a real material risk, or is it just something the administration is looking to do to make everyone happy? A: (William Krueger, President and CEO) We don't think it's prudent to speculate on what the EPA or administration is thinking on SREs. We believe small refineries should only have exemptions when they can demonstrate economic stress from the RFS. We applaud the EPA for expediting the process. From our perspective, we do not see the end result being material to the Andersons and our ability to generate the types of numbers we've talked about historically. Q: Over the next 12 to 18 months, where do you see the greater incremental earnings opportunity: a broader recovering grain asset earnings or sustained strength in the renewable platform? A: (William Krueger, President and CEO) We have a very focused strategy in renewables, with projects underway and a desire to add more gallons to our fleet if the price is correct. However, there are many dynamics in agribusiness that will set the table for the next 12 to 18 months, including the large corn crop, weather challenges in the Western Corn Belt, and geopolitical tensions. We believe the trough for the ag market was likely set in 2025, and the increase in North American demand will drive a rebound. We feel confident in both segments with tailwinds in renewables and our focus on efficiency and merchandising opportunities. Q: If oil were to get much cheaper, what are the different puts and takes across the whole portfolio? A: (William Krueger, President and CEO) The oil complex has a less material value on the Andersons than people may think. If fuel dropped substantially, fuel surcharges would likely go away, but natural gas prices could also be reduced. Blending economics today with current corn and ethanol prices are still very attractive, not just in the US but globally, as countries continue to drive toward higher blend rates. The size and condition of the corn and soybean crop, including the ability to bring cattle back from Mexico, is a much larger variable than the crude market dropping. Q: You have some capacity coming on in the fourth quarter with the Houston project. How do you feel about the outlook for meal demand growth and the target markets for that new export capacity? A: (William Krueger, President and CEO) We are very excited about the Houston project. We got delayed slightly due to heavy rains, but the team has done a great job working through it. We believe the opportunity to increase overall agribusiness results utilizing Houston as both a grain and soybean meal export terminal will pay dividends. We have been working for the better part of nine months with destination consumers of soybean meal and feel very confident we will have the size of book we need to execute in Houston. Q: Can you discuss the relative seasonality of the fertilizer business between Q1 and Q2, and the degree to which elevated pricing drove excess profitability within the second quarter? A: (William Krueger, President and CEO) Applications were skewed a bit more towards Q1 than Q2, and we saw a drop in domestic fertilizer prices towards the end of Q2. All in all, it was pretty much as expected coming into the year. The profitability was driven by efficiencies realized throughout the first half, combined with solid management and continued integration into agribusiness, which drove higher margins and execution. The team also did a very good job placing the volumes needed at each location. Q: Can you level set expectations for the Skyland assets in the Western Belt and talk about the puts and takes versus expectations going into the year? A: (William Krueger, President and CEO) The Skyland region is one of the driest in the Western Corn Belt, which minimized hard wheat production. Kansas had one of its lowest years in recent history, and Skyland was not immune. We need rain in most of the Western Corn Belt. However, Skyland was one area where we grew our forward book, indicating improved management execution. The balance of the year will be weather-driven. If dryness continues and there's a smaller feed grains crop in the West, it should provide more merchandising opportunities in the Western Corn Belt. Q: Where do you see US and global ethanol blend rates headed, given that product tightness will likely carry well into 2027? A: (William Krueger, President and CEO) Today, it feels like blending rates will continue to trend higher. From 2024 to 2025, our blend rate gained 14 basis points, finishing 2025 at 10.51. Domestically, we expect the same type of increase, if not slightly more, with likely an increasing rate through voluntary blending. Q: You noted you were evaluating other CI-reducing projects outside of Clymers. Could you elaborate on some of the projects you're contemplating? A: (William Krueger, President and CEO) Publicly, until we announce them, we're not going to talk about other projects we're considering until we actually execute For the complete transcript of the earnings call, please refer to the full earnings call transcript.