REX AMERICAN RESOURCES Corp (REX)·Q2 2026 Earnings Summary

Executive Summary

• Q2 2026 (three months ended Jul 31, 2025) delivered stable revenue but margin compression: revenue $158.6M (+7.0% y/y; +0.1% q/q), diluted EPS $0.43 (vs $0.70 y/y; $0.51 q/q) as lower DDG prices and higher shipping costs weighed on gross profit .
• Company announced a 2-for-1 stock split and reiterated strong balance sheet with $310.5M cash and no bank debt; share buyback capacity was doubled post-split to 2,357,186 shares .
• Operations: ethanol volumes rose to 70.6M gallons (+8% y/y); corn oil volumes and pricing improved sharply (+14% volume, +26% price y/y), while DDG pricing was weaker y/y and shipping costs rose .
• Outlook: management expects Q3 to be better than Q2 but below last year’s Q3; One Earth expansion remains on track for 2026 and EPA Class VI well decision timeline moved up to March 2026 (from April) according to EPA’s site .
• Consensus context: S&P Global showed no usable sell-side consensus for EPS or revenue this quarter; therefore, no beat/miss determination vs Street can be made (see Estimates Context) [functions.GetEstimates].

What Went Well and What Went Wrong

• What Went Well

  • Strong balance sheet and capital actions: $310.5M cash/short-term investments and no bank debt; 2-for-1 split and expanded repurchase capacity support liquidity and shareholder returns .
  • Operations execution and product mix: Ethanol volumes increased to 70.6M gallons; corn oil volumes ~23.1M lbs with pricing up ~26% y/y, driving ~46% y/y sales dollar increase for corn oil .
  • Strategic progress and policy tailwinds: “Our ethanol expansion project remains on schedule for completion in 2026… We are pleased with the extension of the provisions for 45Z and 45Q tax credits…,” said CEO Zafar Rizvi .

• What Went Wrong

  • Margin compression: Gross profit fell to $14.3M vs $19.8M y/y; CFO cited lower DDG prices (avg $143.63/ton vs $164.45 y/y) and higher shipping costs flowing through COGS .
  • Lower interest income: Interest and other income declined to $3.1M vs $4.4M y/y amid lower balances/rates, pressuring the bottom line .
  • DDG export softness: Management noted DDG exports were down versus last year (e.g., Mexico buying less), contributing to weaker DDG pricing relative to corn .

Financial Results

Notes: Periods shown oldest → newest. All figures are as reported in company materials.

Actuals vs estimates (S&P Global)

• S&P Global showed no consensus EPS or revenue for Q2 2026; estimates were unavailable to assess beat/miss. Values retrieved from S&P Global. [functions.GetEstimates]

KPIs and operating statistics

Balance sheet snapshot

• Cash, cash equivalents and ST investments: $310.5M; no bank debt as of Jul 31, 2025 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The second quarter continued REX’s excellent track record… marked our 20th consecutive quarter of positive earnings… Our ethanol expansion project remains on schedule for completion in 2026… We are pleased with the extension of the provisions for 45Z and 45Q tax credits…” — Zafar Rizvi, CEO .
• “Our third quarter for 2025 is on pace to outperform the second quarter, but will not be as strong as our last year's third quarter…” — Zafar Rizvi, CEO .
• “Corn oil continues to be very strong. DDG is a little weak relative to corn prices… DDG export has dropped… even Mexico is buying less…” — Stuart Rose and Zafar Rizvi .
• “Interest and other income totaled $3.1M vs $4.4M y/y… reflecting lower rates and lower investments.” — Doug Bruggeman, CFO .

Q&A Highlights

• CCS/pipeline path: Interconnection issue resolved; with Illinois moratorium expiring, company expects to proceed, subject to county special use and IEPA permits; 6.5-mile pipeline build could take “a couple of months” post-ICC approval .
• CI score/45Z eligibility: Awaiting final guidelines; removal of smart-farming mandates could provide 4–6 point benefit; potential to qualify for credits even pre-CCS not ruled out, but no commitments until rules final .
• Market outlook: Q3 expected to be better than Q2; exports supportive; DDG exports softer; bumper crop should benefit margins .
• Shipping costs: Higher shipping flowed through COGS, impacting gross profit (no impact on sales), alongside lower DDG prices .

Estimates Context

• S&P Global consensus was not available for EPS or revenue for Q2 2026; therefore, no beat/miss vs Street can be determined. Values retrieved from S&P Global. [functions.GetEstimates]
• Implication: Given management’s Q3 commentary (better than Q2 but below last year’s very strong Q3) and supportive export/corn backdrops, any existing models should reflect sequential improvement into Q3 with continued DDG price caution and lower interest income vs last year .

Key Takeaways for Investors

• Core operations steady; revenue stable q/q and up y/y, but mix and logistics drove gross margin compression; watch DDG pricing and shipping costs into Q3 .
• Policy backdrop improving: 45Q/45Z extension commentaries and EPA timeline pull-forward to March 2026 reduce project uncertainty; potential multi-year tax credit tailwinds if CCS goes live in 2026 .
• Near-term catalyst: 2-for-1 split and expanded buyback capacity may support liquidity and technical positioning; balance sheet remains a differentiator (no debt, $310.5M cash/short-term investments) .
• Volume/mix positives: Corn oil pricing strength and ethanol export momentum provide offsets to DDG weakness; bumper corn harvest should aid crush spreads .
• Outlook framing: Management sees Q3 better than Q2 but below last year’s exceptionally strong Q3; model modest sequential improvement with conservative DDG assumptions .
• Project delivery: One Earth expansion on track for 2026; combined CCS + expansion budget maintained at $220–$230M—discipline intact .
• Watch regulatory milestones: County/IEPA/ICC approvals and final Class VI permit; a pipeline build could be executed quickly post-approvals, enabling CCS economics in 2026 .