Shares of Darling Ingredients Inc. (NYSE: DAR) plunged over 7% in pre-market trading on Thursday after the company reported disappointing third-quarter results that missed analysts' expectations.
For the quarter ended September 28, 2024, Darling Ingredients reported earnings of $0.11 per diluted share, significantly lower than the consensus estimate of $0.40 per share. The company's revenue of $1.42 billion also fell short of analysts' expectations of $1.48 billion.
The weaker-than-expected performance was attributed to challenging market conditions, lower finished product pricing, and reduced earnings from the Diamond Green Diesel (DGD) joint venture. Darling Ingredients' chairman and CEO, Randall C. Stuewe, acknowledged the headwinds, stating, "During the third quarter, Darling Ingredients continued to navigate challenging markets. 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, which produces renewable diesel, saw its operating income decline to $9.9 million in the third quarter, compared to $117.8 million in the same period last year. This was primarily due to lower finished product prices and a lower-of-cost-or-market inventory valuation adjustment.
Despite the challenges, Stuewe expressed optimism about the company's prospects, citing the evolving regulatory landscape and the commissioning of a sustainable aviation fuel plant as potential drivers for future growth and improved margins.
Comments