Ethanol producer REX American Resources announced its first quarter fiscal 2026 results on Thursday, revealing a net profit that doubled year-over-year. Earnings per share significantly surpassed market expectations, setting a record for the company's best first-quarter performance in its history.
The financial report shows that REX's first-quarter net income attributable to common shareholders was $18.5 million, or $0.56 per share, more than doubling compared to $8.7 million ($0.26 per share) in the same period last year. This figure far exceeded the analyst consensus estimate of $0.14, surpassing it by $0.42. However, the company's revenue was $156.5 million, slightly below last year's $158.3 million and also missing the market expectation of $167.2 million, primarily due to lower ethanol prices.
Despite the slight revenue decline, the company's gross margin surged significantly to $29.1 million from $14.3 million in the prior-year period. This improvement was largely driven by $7.5 million in production tax credit income and lower corn costs, which effectively offset the negative impact of weak ethanol prices. Consolidated ethanol sales volume for the first quarter was 71.1 million gallons.
REX CEO Zafar Rizvi stated that the first quarter of 2026 continued the company's strong operational and financial momentum, achieving the best first-quarter performance in history on a net earnings per share basis. He noted that the core ethanol business maintained its excellent track record of sustained profitability, benefiting from favorable industry conditions and opportunities presented by the 45Z tax credit policy.
REX is currently nearing completion of the ethanol production capacity expansion at its One Earth plant. Testing and commissioning are expected to commence immediately upon completion, with full-scale operation planned within fiscal year 2026. The company's carbon capture and sequestration project is still awaiting permits from the U.S. Environmental Protection Agency for Class VI injection wells and associated carbon dioxide pipelines.
As of April 30, 2026, REX maintains a strong balance sheet, holding cash, cash equivalents, and short-term investments totaling $364.3 million, with no bank debt. Boosted by the better-than-expected earnings, the company's stock price rose 1.67% following the earnings release.