Darling Ingredients misses Q3 estimates, shares fall 7%

IRVING, Texas - Darling Ingredients Inc. (NYSE:DAR ) reported third-quarter earnings that fell short of analyst expectations, sending shares down 7% in premarket trading Thursday. The company's performance was impacted by declining fat prices and lower earnings from its Diamond Green Diesel (DGD) joint venture.

For the third quarter, Darling Ingredients posted earnings per share of $0.11, missing the analyst estimate of $0.47 by $0.36. Revenue came in at $1.4 billion, below the consensus estimate of $1.49 billion and down from $1.6 billion in the same quarter last year. The company attributed the revenue decline to lower finished product pricing.

Net income for the quarter was $16.9 million, a significant drop from $125.0 million in Q3 2023. Combined adjusted EBITDA fell to $236.7 million from $334.3 million YoY.

"During the third quarter, Darling Ingredients continued to navigate challenging markets," said Randall C. Stuewe, Chairman and Chief Executive Officer. "Even with these headwinds, our core ingredients cash flows and dividends from DGD allowed us to reduce debt by about $192 million."

The company's DGD joint venture sold 316.6 million gallons of renewable diesel in Q3 at an average EBITDA of $0.25 per gallon. Darling Ingredients received $111.2 million in cash dividends from DGD during the quarter.

Looking ahead, Darling Ingredients expects combined adjusted EBITDA for the full fiscal year to be between $1.15 billion and $1.175 billion. The company anticipates improved performance in 2025, citing factors such as the commissioning of its sustainable aviation fuel plant and an evolving regulatory landscape supportive of waste fats and oils as feedstocks in renewable fuels.

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Source: Investing.com