REX American resources net income doubles on tax credits, lower corn costs

REX American Resources (NYSE:REX) reported that its fiscal first-quarter net income more than doubled, overcoming a slight top-line contraction as government incentives and falling raw material costs significantly expanded margins for the biofuel producer.

The company posted net income attributable to shareholders of $18.5 million, or $0.56 per diluted share, for the three months ended in early 2026.

This represents a substantial increase from the $8.7 million, or $0.26 per share, recorded during the first quarter of the prior fiscal year.

The per-share outperformance was also marginally supported by share buybacks, with diluted weighted average shares outstanding dropping to 33.1 million from 33.9 million a year earlier.

Net sales and revenue dipped to $156.5 million compared to $158.3 million in the prior-year period.

Management attributed the revenue decline primarily to lower prevailing market prices for ethanol.

REX's operations during the quarter reflected its financial stakes in six ethanol production assets, consolidating results from the One Earth Energy and NuGen Energy facilities while recording four additional plants as equity in income of unconsolidated affiliates.

Despite the lower pricing environment, the company's gross profit surged to $29.1 million, up from $14.3 million in the first quarter of 2025.

The profitability expansion was primarily driven by the recognition of $7.5 million in production tax credit income alongside a meaningful reduction in corn input costs, which represent the primary feedstock expense for commercial ethanol distillation.

These operational tailwinds more than cushioned the impact of depressed energy prices.

Further down the ledger, REX reported interest and other income of $3.2 million, down from the $4.2 million posted in the identical period last year.

However, the drop was heavily outweighed by core processing gains, allowing the company's income before taxes and non-controlling interests to climb to $26.1 million from $13.6 million in the prior year's quarter.