REX American rallies on Q3 earnings beat, biofuel mandate changes
REX American Resources (NYSE:REX) +18.7% Thursday for its biggest intraday gain in a year and a half after the ethanol maker comfortably beat Q3 GAAP earnings expectations despite significant increases in corn and natural gas costs.
REX American (REX) attributed its 8.5% Y/Y gain in revenues to higher pricing for ethanol, dried distillers grains, non-food grade corn oil and modified distillers grains.
Q3 income before income taxes and non-controlling interests fell to $6.1M from $19.2M in the year-ago quarter, and gross profit for continuing operations slid to $11.3M from $25.2M a year earlier.
Q3 "marked a difficult operating environment as we faced significant price increases in our two largest inputs - corn and natural gas - as well as ongoing logistical constraints," CEO Zafar Rizvi said, but "we were able to post our ninth consecutive quarter of positive income along with income per share for the first nine months of fiscal 2022 of $1.10."
REX American (REX) shares likely are also helped by the latest biofuel mandate changes, which raised the amount of renewable fuel that oil refiners must blend into their gasoline and diesel.