Andersons NASDAQ: ANDE reported higher third-quarter earnings as improved renewable-fuels economics and stronger merchandising execution lifted results, while the company also announced an agreement to acquire Harvestone Low Carbon Partners for $915 million, inclusive of working capital.
Net income attributable to The Andersons was $46 million, or $1.36 per diluted share, in the third quarter of 2026. Adjusted net income was $47 million, or $1.38 per diluted share, compared with $29 million, or $0.84 per diluted share, in the prior-year quarter. Adjusted pretax income rose to $54 million from $31 million, while adjusted EBITDA increased to $101 million from $78 million.
President and Chief Executive Officer Bill Krueger said the company delivered record third-quarter earnings per share and that trailing 12-month adjusted EPS increased to $6.67 from $2.56 in the third quarter of 2025. He said the result puts the company “well on our way” toward its target of $7 in EPS exiting 2028.
Renewables results improve despite lower board crush
The Renewables segment generated pretax income of $63 million, compared with adjusted pretax income attributable of $46 million a year earlier. Segment EBITDA rose to $78 million from $67 million.
Krueger said ethanol operations benefited from improved co-product values, lower corn basis and focused plant operations, even as ethanol board crush was down $0.10 per gallon year over year. Chief Financial Officer Brian Valentine said plant profitability improved on lower eastern corn basis and higher co-product values, while renewable feedstock merchandising results declined because of competition from foreign feedstocks and lower demand from bio-based diesel plants.
Executive Vice President of Renewables Mark Simmons said volatility in the RIN market over the previous 60 days was primarily related to uncertainty surrounding reallocation. While the decline affected blending margins, he said margins remained sufficient to support domestic blending and higher blend rates.
Management said it expects ethanol production to rise in 2027, supported by projected strong U.S. ethanol exports, elevated global fossil-fuel prices, the renewable volume obligation, and favorable blending economics. Krueger also said year-round E15 approval would further increase blending and reduce gasoline costs for consumers.
Agribusiness gains amid varied harvest conditions
The Agribusiness segment reported adjusted pretax income attributable of $9 million, up from $2 million in the third quarter of 2025. Adjusted EBITDA increased to $40 million from $29 million.
Valentine said merchandising businesses benefited from strong execution and market volatility. However, the company’s grain assets experienced less space income during the quarter because harvest started late, while lower yields and weak demand in the Western Corn Belt reduced grain volumes. Fertilizer results were similar to the prior year during what management described as a seasonally quiet period.
Krueger said eastern operations were finishing a strong harvest, with record soybean yields and strong receipts. Corn yields were more variable, but he said the company expects total corn and soybean harvest volumes to exceed its initial expectations. That could support improved elevation margins and space income, as well as provide lower-cost, higher-quality corn for the company’s ethanol plants.
In the West, drought conditions have reduced volumes, though Krueger said the company’s combined asset and merchandising portfolio can help it respond to customer needs. He added that August rainfall improved soybean-yield prospects nationally and replenished subsoil moisture, which could support higher hard- and soft-wheat acreage.
The company also said its Port of Houston project is complete and that it has begun originations and marketing activity for a combined domestic and export soybean-meal strategy. Fall fertilizer applications and sales have started well, according to management, with farmers maintaining application rates and eastern volumes remaining solid.
Harvestone acquisition targets low-carbon ethanol growth
The Andersons announced an agreement to acquire Harvestone Low Carbon Partners, or HLCP, which owns and operates three ethanol plants with combined annual production of about 215 million gallons. The facilities are Blue Flint Ethanol and Dakota Spirit in North Dakota, and Iroquois Bio-Energy Company, or IBEC, in Indiana.
The $915 million purchase price includes working capital. Krueger said about half of the purchase price is attributed to expected 45Z and 45Q tax-credit cash flows, with the remainder tied to base ethanol operations and additional low-carbon opportunities.
The transaction is expected to be financed entirely with debt, including approximately $300 million from the company’s existing revolving credit facility and $615 million in additional committed long-term debt. At closing, management expects long-term debt to EBITDA to be approximately 2x, below its target of less than 2.5x.
Management expects the acquisition to be immediately accretive to EPS and to generate EBITDA of $225 million to $250 million in each of the next three years. The company expects to close the transaction later in the fourth quarter or shortly after the start of 2027.
Blue Flint has been sequestering carbon on-site for about three years, while Dakota Spirit is expected to begin sequestering carbon in early 2027. IBEC has filed a Class VI well permit with the Environmental Protection Agency and is expected to begin sequestration in late 2028, according to the company.
Krueger said all three facilities offer debottlenecking opportunities. The company expects production capacity across the three plants could surpass 250 million gallons over roughly 24 to 36 months. Following the acquisition’s closing, The Andersons expects its annual ethanol production volume to reach about 730 million gallons, increasing to 760 million gallons in the third quarter of 2027.
Cash flow, capital spending and outlook
Cash flow from operations before changes in working capital rose to $83 million from $68 million a year earlier. The company said it has signed an agreement to sell most of the 45V tax credits it expects to generate in 2026, with most related cash expected later this year.
Third-quarter capital spending totaled $60 million, compared with $67 million a year earlier. The company expects approximately $225 million in capital spending for the full year, excluding acquisitions, and repurchased approximately $15 million of shares during the quarter. Its long-term debt-to-EBITDA ratio was 1.3x at quarter-end.
Valentine said the company expects its full-year adjusted effective tax rate to range from 14% to 18%, following a 13% effective tax rate in the third quarter.
About Andersons (NASDAQ:ANDE)
The Andersons, Inc NASDAQ: ANDE is an agribusiness company that provides products and services supporting the agricultural supply chain. Founded in 1947 and headquartered in Maumee, Ohio, the company serves farmers, agricultural retailers, manufacturers, and other customers primarily in North America.
The company's Trade segment merchandises and manages the movement and storage of grains and other agricultural commodities. Its operations include grain elevators, commodity trading, logistics, and related services that connect producers with domestic and international markets.
Through its Ethanol segment, The Andersons produces renewable fuels and markets co-products such as distillers grains and corn oil.
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