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Ingredion Inc (INGR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was softer-than-expected: net sales fell 3% to $1.816B, reported EPS $2.61 and adjusted EPS $2.75, with operating income down 7% (adjusted down 10%) year over year, driven by U.S./Canada operational issues and LATAM brewing softness .
  • Ingredion missed Wall Street consensus on revenue and EPS: Revenue $1.816B vs ~$1.891B*, adjusted EPS $2.75 vs ~$2.89*; EBITDA ~$308M vs ~$329M*, reflecting margin and volume pressures, partially offset by FX .
  • Guidance was narrowed/lowered: FY25 reported EPS to $11.11–$11.31 (from $11.25–$11.75), adjusted EPS to $11.10–$11.30; net sales now “flat to down low single-digits”; operating income up “low to mid single-digits” .
  • Texture & Healthful Solutions (T&HS) remained a bright spot: operating income +9% YoY to $105M on 4% volume growth and lower input costs; clean-label grew double digits in U.S./Canada and Asia-Pacific .
  • Stock catalysts: management announced a new share repurchase authorization for up to 8 million shares over three years and lifted the 2025 buyback target to $200M, alongside continued strong T&HS execution and cost-to-compete savings >$55M run-rate by year-end .

What Went Well and What Went Wrong

What Went Well

  • T&HS delivered resilient performance: net sales +1% to $605M and operating income +9% to $105M, aided by lower raw material costs and volume growth; segment OI margin ~17.4% .
  • Clean-label momentum: “double digit sales increases for clean label ingredient solutions in U.S./Canada and Asia-Pacific,” and solutions portfolio outpaced segment net sales growth .
  • Cost discipline and strategic initiatives: management expects to “surpass our $50 million run-rate cost-to-compete savings target and will realize more than $55 million in run-rate savings by the end of 2025” .
  • Quote: “Texture & Healthful Solutions delivered a solid performance with 4% sales volume growth… New specialty solutions capacity investments… will further position us to meet growing customer reformulation requirements.” — Jim Zallie .

What Went Wrong

  • U.S./Canada operational disruption: F&II U.S./Canada operating income down 18% to $81M; Argo plant fire and recovery impacted Q3 by ~$12M, constraining inventories and sales .
  • LATAM brewing softness: LATAM operating income down 11% to $116M on weaker brewing volumes and softer consumer demand; ~40% of revenue decline tied to brewing, with a unique customer contract rollover timing effect .
  • Headwinds in margin and volume: earnings bridge shows operating margin -$0.22/sh and volume -$0.12/sh; net financing costs rose to $7M vs $1M in Q3 2024 .
  • Analyst concerns: demand softness in July–August for sweeteners, tariffs indirectly pressuring customers, and cautious H2 setup in U.S./Canada and LATAM .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net Sales ($USD Billions)$1.870 $1.833 $1.816
Reported Diluted EPS ($)$2.83 $2.99 $2.61
Adjusted Diluted EPS ($)$3.05 $2.87 $2.75
Operating Income ($USD Millions)$268 $271 $249
Adjusted Operating Income ($USD Millions)$282 $273 $254
Gross Margin (%)—~26.0% ~25.1%

Segment breakdown (Net Sales and Operating Income):

SegmentNet Sales Q3 2024 ($MM)Net Sales Q3 2025 ($MM)Operating Income Q3 2024 ($MM)Operating Income Q3 2025 ($MM)
Texture & Healthful Solutions$600 $605 $96 $105
F&II – LATAM$620 $585 $131 $116
F&II – U.S./Canada$548 $507 $99 $81
All Other$102 $119 ($4) ($4)
Corporate——($40) ($44)
Adjusted Operating Income——$282 $254

KPIs and selected items:

KPIQ3 2024Q3 2025
Reported ETR (%)30.8% 28.6%
Adjusted ETR (%)26.9% 26.4%
Net Financing Costs ($MM)$1 $7
Total Debt (Period-end) ($B)$1.8 (Dec 31, 2024) $1.8 (Sept 30, 2025)
Cash + ST Investments ($B)$1.0 (Dec 31, 2024) $0.921 (Sept 30, 2025)
Dividends Paid in Q3 ($MM)—$54
Share Repurchases YTD ($MM)—$134
Net Capex YTD ($MM)—$298

Q3 2025 results vs S&P Global consensus (miss/beat):

MetricActualConsensusSurprise
Revenue ($USD Billions)$1.816 ~$1.891*Miss ~$0.075B*
Adjusted EPS ($)$2.75 ~$2.89*Miss ~$0.14*
EBITDA ($USD Millions)~$308*~$329*Miss ~$21M*

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported EPSFY 2025$11.25–$11.75 $11.11–$11.31 Lowered
Adjusted EPSFY 2025$11.10–$11.60 $11.10–$11.30 Narrowed lower high-end
Net SalesFY 2025Flat Flat to down low single-digits Lowered
Operating Income (Reported/Adjusted)FY 2025Up mid-single-digits Up low to mid single-digits Lowered
T&HS OI GrowthFY 2025Up low double-digits Up high double-digits Raised
F&II – LATAM OIFY 2025Up low single-digits Flat to up low single-digits Lowered
F&II – U.S./Canada OIFY 2025Down low single-digits Down low double-digits Lowered
Corporate CostsFY 2025Up high single-digits Up high single-digits Maintained
Reported ETRFY 202525.1%–26.6% 25.5%–26.5% Narrowed
Adjusted ETRFY 202526.0%–27.5% 26.0%–27.0% Narrowed
Cash from OperationsFY 2025$825–$950M $800–$900M Lowered
CapexFY 2025$400–$425M $400–$425M Unchanged
Share RepurchasesFY 2025≥$100M target Target raised to $200M; new 8M-share authorization over 3 years Increased / New authorization

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 & Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesDigital infrastructure investments; procurement/demand forecasting gains (Q2) Global AI forum launched; priorities: customer experience, supply chain/manufacturing efficiency, innovation Increasing focus and organization-wide adoption
Supply chain/operationsQ2: Brief Chicago plant outage; recovering inventories Argo fire impact lingered; ~$12M OI hit in Q3; stabilization underway into Q4 Near-term recovery underway
Tariffs/macroQ2: minimal direct impact; cautious outlook amid tariff uncertainty Continued caution; indirect impacts via customer pricing; U.S. sweetener demand down in July–Aug, recovering in Sept Persistent macro caution
Product performance (clean label, solutions)Q1/Q2: clean label growth; solutions selling strength Clean label double digit in U.S./Canada and APAC; solutions outpaced segment net sales Strengthening
Regional trends (LATAM)Q1: Strong LATAM OI with FX tailwinds; Q2: JV lapping strong prior-year; macro weakness noted LATAM OI -11% YoY; brewing volumes soft; mix shifting to food/confectionery Weak near term; medium-term mix improvement
Regulatory/legal (Mexico beverages)—Discussion of proposed “sweetness” tax impacting caloric and non-caloric drinks; expected short-term volume impact and consumer adjustment Emerging regulatory headwind in 2026
R&D/innovation executionQ2: customized formulations and category solutions growth Egg/cocoa replacement solutions; sweet proteins and clean taste solutions Expanding solution pipeline
Health features/affordabilityQ2: wellness trends driving reformulations Affordability and label simplicity behind solutions-led demand Sustained driver

Management Commentary

  • “The benefits of Ingredion’s diversified business portfolio were evident… Texture & Healthful Solutions delivered another strong quarter… while our F&II businesses were impacted by lower volume demand and operational challenges at our largest facility in the U.S.” — Jim Zallie .
  • “We estimate that the cumulative operating income impact to [Argo] was approximately $22 million across both the second and third quarters, with $12 million of that… in quarter three.” — Jim Zallie .
  • “We feel confident we will surpass our $50 million run-rate cost-to-compete savings target and will realize more than $55 million… by the end of 2025.” — Jim Zallie .
  • “We have raised [T&HS] operating income profit growth to now be up high double digits [for FY25].” — Jim Gray .
  • “Our board has authorized a new share repurchase program of up to eight million shares over the next three years.” — Jim Zallie .

Q&A Highlights

  • Demand backdrop: softness in July–August for U.S. sweeteners related to customer pricing/packaging inflation; recovery in September; caution into Q4 but no repeat of July–August step-downs expected .
  • Argo operational impact: ~$12M of the $18M YoY OI decline in U.S./Canada attributable to Argo in Q3; focus on reliability and running at normal capacities into 2026 .
  • LATAM brewing/customer mix: ~40% of LATAM revenue decline tied to brewing; a large customer contract rollover timing issue “now satisfactorily resolved”; shifting grind to higher margin food/confectionery .
  • Mexico beverage tax proposal: expected initial “sticker shock” followed by consumer adjustment; limited direct impact given local production mix (more glucose vs HFCS) .
  • Guidance mechanics: conservatism reflects tariff and macro uncertainty; T&HS margins likely in high teens with potential pullback from Q2’s step-up; upside if sourcing costs ease .

Estimates Context

  • Q3 2025 actuals vs consensus: Revenue $1.816B vs ~$1.891B*, adjusted EPS $2.75 vs ~$2.89*, EBITDA ~$308M vs ~$329M*. Post-quarter revisions likely lower for U.S./Canada and LATAM given guidance, while T&HS likely sees upward bias on OI growth .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Expect continued recovery at Argo to support U.S./Canada volumes/margins into Q4 and 1H26; monitor October–December sweetener demand trajectory and tariff-linked pricing elasticity .
  • Segment mix matters: T&HS strength (clean label, solutions) offsets cyclical F&II headwinds; FY25 T&HS OI growth raised to high double digits—key driver for consolidated margin resilience .
  • LATAM watch items: brewing demand normalization and contract timing normalization; ongoing mix shift toward food/confectionery should stabilize margins despite macro softness .
  • Capital allocation: Increased FY25 buyback target to $200M and new 8M-share authorization provide downside support; dividend increased to $0.82/share (11th consecutive annual rise) .
  • 2025 Guidance reset: EPS range narrowed/lowered; net sales now flat to down LSD; OI up low–mid SD—sets a conservative base for 2026 as operational recovery, T&HS growth, and cost savings compound .
  • Regulatory risk: Mexico beverage tax proposal may drive short-term volume disruptions in 2026; consumer adjustment historically follows; limited direct exposure due to local product mix .
  • Execution levers: AI/digital initiatives, procurement/sourcing efficiencies, and customized formulations pipeline position T&HS for sustained growth and margin accretion .

Additional Relevant Press Releases (Q3 period context)

  • Dividend increase to $0.82 per share (declared Aug 27, 2025; paid Oct 21, 2025) .
  • Appointment of Patrick Kalotis as EVP, Global Texture & Healthful Solutions (effective Dec 1, 2025), reinforcing segment leadership momentum .
  • Earnings release scheduling (Oct 14) .