Ingredion Q2 Earnings Call Highlights

Key Points

• Q2 results were broadly in line with expectations: Net sales rose 1% to $1.85 billion, while adjusted operating income fell 5% to $258 million as Argo production issues, softer U.S./Canada demand and macroeconomic pressures weighed on earnings.
• Texture & Healthful Solutions remained the key growth engine, with sales and operating income each increasing 5% on 7% volume growth. However, tapioca costs have risen more than 40% since the start of the year, creating a near-term margin headwind.
• Ingredion reaffirmed its full-year adjusted EPS outlook of $10.30–$10.90 and expects U.S./Canada operating income to decline 20%–25% due to Argo disruptions. The proposed all-cash Tate & Lyle acquisition was approved by shareholders and remains subject to regulatory and other closing conditions.

Ingredion NYSE: INGR reported second-quarter 2026 results that were in line with its expectations, as continued growth in Texture & Healthful Solutions offset operational and macroeconomic pressures in other parts of the portfolio.

Second-quarter net sales increased 1% year over year to $1.85 billion. Reported operating income was $188 million, while adjusted operating income declined 5% to $258 million. The company said results were affected by manufacturing issues at its Argo facility, softer demand in Food & Industrial Ingredients—U.S./CAN, and foreign-exchange and macroeconomic headwinds in Mexico.

Adjusted diluted earnings per share declined $0.05 from the prior year. Ingredion said margin impacts reduced earnings by $0.34 per share, partly offset by favorable foreign exchange, other income, share repurchases and lower financing costs.

Texture & Healthful Solutions Extends Growth Streak

Texture & Healthful Solutions remained the company’s primary growth driver. Segment net sales rose 5%, supported by 7% volume growth and favorable foreign exchange, while operating income also increased 5%. The segment recorded its second-highest quarterly operating income ever, according to the company.

Chairman, President and CEO Jim Zallie said the quarter marked the segment’s ninth consecutive quarter of net-sales volume growth. Growth was broad-based across solutions offerings and clean-label ingredients, with customer activity centered on health and wellness reformulation, protein and fiber fortification, sugar reduction and clean-label products.

Ingredion said higher tapioca costs remained a near-term headwind. Root prices have increased more than 40% since the start of the year because weather-related conditions have constrained supply. The company is passing through price increases, although it said the process generally requires about one to one-and-a-half quarters.

Jason Payant, Ingredion’s vice president and interim CFO, said the company does not view the tapioca cost increase as a structural margin issue. He said the company expects costs to normalize over time and described the broader inflationary effects tied to the Middle East conflict as manageable, with a net impact in the range of a few million dollars that is already reflected in guidance.

Argo Facility Improves, but U.S./Canada Segment Remains Pressured

Food & Industrial Ingredients—U.S./CAN posted a 7% decline in second-quarter sales, and operating income was $58 million. Ingredion attributed the results to production challenges at the Argo facility, softer consumer demand and weaker price mix.

Zallie said reliability and production improved sequentially at Argo during the quarter, with all major units operating at normal production rates by the end of June. The company has addressed issues involving grinding, downstream refining and an April thermal event that affected its germ-processing unit, he said.

Ingredion is also increasing targeted capital spending at the facility to support reliability, including added redundancy in saccharification tanks. Zallie said the company has conducted root-cause work across maintenance, training, leadership and operating procedures.

Payant said costs associated with prior production disruptions will continue to flow through inventory into July, but Ingredion expects the plant to rebuild inventories and return toward historical margins by the end of the year. The company expects the U.S./CAN business to return to normal operating profit margins and levels in 2027, although some effects from production-network changes may persist into next year.

In Food & Industrial Ingredients—LATAM, sales increased 3%, while operating income fell 7% to $118 million. Mexico faced transactional currency effects and a challenging demand environment, while South America benefited from regional strength, including growth in Brazil’s industrial and brewing markets.

Portfolio Moves and Tate & Lyle Transaction

Ingredion highlighted several portfolio and innovation actions during the quarter. The company announced a strategic partnership with Sanstar in India to expand pharmaceutical excipient capabilities and access large-scale manufacturing. It also acquired Benicaros, a clinically supported immune-health prebiotic, and introduced Ask Ingredion, an artificial intelligence-powered formulation platform for customers.

The company also cited growth opportunities in sustainable packaging, including plant-based alternatives to PFAS-containing grease-resistant barriers and bio-based adhesive solutions for corrugated packaging. Net sales in the company’s All Other category rose 8%, aided by more than 40% growth in protein fortification sales, particularly higher-value isolates and specialty applications.

Ingredion also continued reshaping its portfolio through the sale of its majority stake in its Pakistan business and the closure of its Cabo, Brazil, plant. The company said those actions reduce exposure to less differentiated ingredients.

Meanwhile, Tate & Lyle shareholders approved Ingredion’s proposed all-cash acquisition of the company. Zallie said the transaction now awaits regulatory reviews and other closing conditions. Ingredion continues to expect the deal to add $2.7 billion in complementary revenue, generate $130 million in expected run-rate synergies by 2030 and deliver more than 15% adjusted EPS accretion in the first full calendar year after closing.

Outlook Reaffirmed Despite Pakistan Sale Adjustment

Ingredion reaffirmed its full-year adjusted EPS outlook of $10.30 to $10.90 after accounting for the sale of its majority stake in Pakistan. The company still expects full-year net sales to be flat to up low single digits, although it now expects adjusted operating income to decline by a mid-single-digit percentage.

• Texture & Healthful Solutions sales are expected to rise by a mid-single-digit percentage, with operating income up mid- to high-single digits.
• Food & Industrial Ingredients—LATAM sales are expected to increase by a low-single-digit percentage, while operating income is expected to decline by a low-single-digit percentage.
• Food & Industrial Ingredients—U.S./CAN sales are expected to decline by a low-single-digit percentage, with operating income down 20% to 25% because of first-half Argo disruptions.
• Cash from operations is now projected at $700 million to $800 million, while capital expenditures are expected to total $450 million to $490 million, including additional spending at Argo.

For the third quarter, Ingredion expects net sales to rise by a low-single-digit percentage and adjusted operating income to decline by a mid-single-digit percentage. The company said the outlook reflects the Pakistan divestiture, higher corporate costs relative to the second quarter, and the expected reversal of a $2 million second-quarter mark-to-market gain on its Sanstar investment.

About Ingredion (NYSE:INGR)

Ingredion Incorporated is a global ingredient solutions company specializing in the production and sale of starches, sweeteners, nutrition ingredients and biomaterials derived primarily from corn and other plant-based raw materials. The company serves a diverse set of industries, including food and beverage, brewing, pharmaceuticals and personal care, providing functional ingredients that enhance texture, stability, flavor and nutritional value in a wide array of end products.

The company's product portfolio comprises native and modified starches, high-fructose corn syrup, dextrose, maltodextrins, specialty sweeteners and various texturizers.

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