REX American Resources Corporation's (REX) Q1 2025 earnings fell short, with a reported net income of $12.27 million and an EPS surprise of $0.271, due to several key factors:
- Lower Selling Prices for Ethanol and By-Products: The primary reason for the decrease in net income was lower selling prices for ethanol and by-products. Despite a decrease in corn and natural gas prices, the company's ethanol business faced volatility in corn and ethanol pricing. The Chicago Board of Trade corn prices ranged from $3.62 to $4.97 per bushel, and S&P Global Platts ethanol pricing fluctuated from $1.38 to $2.12 per gallon during the year2. This volatility in pricing negatively impacted the company's financial performance.
- Weaker Selling Prices Across All Products: REX reported net sales and revenue of $642.5 million, down from $833.4 million in the previous year, primarily due to weaker selling prices across all products2. This decline in revenue was a result of the reduced pricing for ethanol and co-products, which contributed to the lower gross profit and net income.
In conclusion, REX's Q1 2025 earnings were affected by lower selling prices for ethanol and by-products, despite a decrease in corn and natural gas prices. This, coupled with weaker selling prices across all products, led to a decline in revenue and gross profit, resulting in a fall in net income.
REX Net Income YoY, Net Income