The Andersons 2025 Q2 Earnings Misses Targets as Net Income Plummets 68%

The Andersons reported fiscal 2025 Q2 earnings on August 6, 2025, showing a significant drop in net income and EPS compared to the prior year. The company exceeded revenue expectations, with total revenue rising 12.2% to $3.14 billion, but earnings fell short of market expectations.

Revenue
The Andersons reported a total revenue increase of 12.2% to $3.14 billion in 2025 Q2, compared to $2.80 billion in the same period in 2024. This growth was driven primarily by its Agribusiness segment, which contributed $2.41 billion, followed by the Renewables segment, which added $721.04 million. The combined performance of these two segments accounted for the company’s total revenue.

Earnings/Net Income
The company's earnings significantly declined in 2025 Q2, with EPS dropping by 78.3% to $0.23 from $1.06 in the prior year. Similarly, net income fell to $16.81 million, a 68.0% decrease from $52.47 million in 2024 Q2. The substantial drop in profitability indicates a challenging operating environment, despite the strong top-line growth.

Price Action
The stock price of The Andersons has experienced mixed performance in the short term. During the latest trading day, shares rose 8.76%, but the stock has declined 5.51% in the most recent full trading week and has tumbled 9.89% month-to-date, reflecting volatility following the earnings release.

Post-Earnings Price Action Review
The strategy of buying ANDE when earnings beat and holding for 30 days delivered strong results, achieving a 137.77% return compared to a benchmark return of 84.41%. The excess return of 53.35% highlights the strategy’s ability to capitalize on earnings beats. With a Sharpe ratio of 0.49 and a maximum drawdown of 0.00%, the strategy also demonstrated robust risk management.

CEO Commentary
President and CEO Bill Krueger emphasized strong operating performance, particularly in the Renewables segment, where ethanol plants reported pretax income of $17 million. He highlighted the strategic acquisition of TAMH, which doubled the company's ownership in the ethanol industry and aligned with long-term growth goals. Krueger also mentioned the progress on the Houston port project, expected to be completed by mid-2026, and expressed confidence in optimizing operations and preparing for a strong fall harvest.

Guidance
The company did not provide specific quantitative targets for the remainder of the year. However, management expressed optimism about the fall harvest and ethanol market dynamics, including the potential for reduced corn costs post-harvest and regulatory support for renewable fuels. CFO Brian Valentine noted that the company remains below its long-term debt to EBITDA target of less than 2.5 times and emphasized strong cash flow generation and liquidity.

Additional News
The Andersons completed the strategic acquisition of the remaining 49.9% ownership interest in The Andersons Marathon Holdings LLC (TAMH) from Marathon Petroleum Corp. for $425 million, including $40 million of working capital. This acquisition, closed on July 31, 2025, was funded with cash on hand and existing credit facilities. With this move, the company now owns 100% of TAMH, which operates four ethanol plants with an annual production capacity of 500 million gallons. The acquisition is expected to provide immediate earnings per share accretion and enhance the company's position in the ethanol industry. The Houston port project, aimed at increasing grain operations and export capacity, remains on track for mid-2026 completion. Additionally, the integration of former Trade and Nutrient businesses is ongoing, with the addition of Skyland Grain, LLC assets into the agribusiness portfolio.