REX Reports Strong First Quarter Fiscal 2026 Results as Ethanol Margins Improve and Strategic Expansion Projects Advance
REX American Resources Corporation, a leading producer in the U.S. ethanol industry, has reported strong financial and operational performance for the first quarter of fiscal 2026, benefiting from improved production margins, lower feedstock costs, and contributions from federal production tax credits. The company also provided updates on major strategic initiatives, including the expansion of its One Earth Energy ethanol facility and the progress of its carbon capture and sequestration project in Illinois.
The company’s first-quarter results demonstrate how operational efficiency, favorable market conditions, and ongoing investments in low-carbon fuel infrastructure are helping strengthen profitability despite challenges in ethanol pricing. While revenue remained relatively stable compared to the prior-year period, earnings improved significantly as lower corn costs and production tax incentives more than offset weaker ethanol market prices.
Revenue Reflects Lower Ethanol Prices
For the first quarter of fiscal 2026, REX generated net sales and revenue of approximately $156.5 million. This compares with net sales and revenue of $158.3 million reported during the same quarter of fiscal 2025.
The modest decline in revenue was primarily driven by lower average ethanol selling prices during the quarter. Ethanol markets continued to experience pricing pressure amid fluctuating fuel demand and broader commodity market conditions. However, despite the slight decrease in top-line revenue, the company was able to significantly improve profitability through cost management and operational performance.
REX’s business model remains diversified across multiple ethanol production assets. The company’s financial results primarily reflect its ownership interests in six ethanol production facilities located across the United States.
Among these facilities, One Earth Energy, LLC and NuGen Energy, LLC are fully consolidated into the company’s financial statements. The remaining four ethanol plants are accounted for through equity income from unconsolidated affiliates, allowing REX to benefit from their operational performance while maintaining a flexible ownership structure.
Production Tax Credits Support Earnings Growth
One of the most significant contributors to the company’s improved earnings during the quarter was income generated through federal production tax credits.
During the first quarter of fiscal 2026, REX recognized approximately $7.5 million in production tax credit income. These incentives are designed to encourage the production of cleaner and lower-carbon transportation fuels and have become an increasingly important component of the renewable fuels sector.
The production tax credits provided meaningful support to profitability and helped offset weaker ethanol pricing conditions. Combined with lower corn feedstock costs, the credits contributed to a substantial increase in gross profit compared with the prior-year period.
As governments continue to promote lower-emission energy solutions and renewable fuel production, tax incentives such as these are expected to remain an important factor influencing the economics of ethanol manufacturing operations.
Gross Profit More Than Doubles
The benefits of improved operating conditions were clearly reflected in REX’s gross profit performance.
The company reported gross profit of $29.1 million during the first quarter of fiscal 2026, more than double the $14.3 million recorded during the same period in fiscal 2025.
Several factors contributed to this dramatic improvement.
Lower corn prices reduced production costs across the company’s ethanol facilities, enhancing operating margins. Corn remains the largest input cost for ethanol producers, making commodity price movements a critical determinant of profitability.
At the same time, production tax credit income provided an additional earnings boost that helped compensate for lower ethanol selling prices.
The combination of these favorable factors enabled REX to achieve substantially stronger profitability despite operating in a challenging ethanol pricing environment.
Income Before Taxes Shows Significant Improvement
The company also recorded lower interest and other income compared with the prior-year quarter. During the first quarter of fiscal 2026, REX reported interest and other income totaling approximately $3.2 million.
This compares with $4.2 million reported during the first quarter of fiscal 2025.
Although non-operating income declined modestly, the improvement in operating profitability more than compensated for the difference.
As a result, income before income taxes and non-controlling interests increased significantly, reaching $26.1 million during the first quarter of fiscal 2026.
In the comparable quarter of fiscal 2025, income before taxes totaled $13.6 million.
The nearly doubling of pre-tax earnings highlights the strength of the company’s operating performance and its ability to capitalize on favorable market conditions and government incentives.
Net Income and Earnings Per Share Rise Sharply
The strong operating results translated directly into substantial growth in bottom-line earnings for shareholders.
Net income attributable to REX shareholders reached $18.5 million during the first quarter of fiscal 2026, compared with $8.7 million reported in the same period a year earlier.
This represents an increase of more than 110% year over year.
Diluted earnings per share attributable to REX common shareholders also showed significant growth. First-quarter fiscal 2026 diluted earnings per share were $0.56, more than double the $0.26 per diluted share reported during the first quarter of fiscal 2025.
The earnings improvement was driven by stronger operating margins, tax credit contributions, and disciplined cost management across the company’s ethanol production network.
Per-share calculations were based on approximately 33.1 million diluted weighted-average shares outstanding during the first quarter of fiscal 2026, compared with approximately 33.9 million diluted weighted-average shares outstanding during the corresponding period of fiscal 2025.
The lower share count also provided a modest benefit to earnings per share performance.
One Earth Energy Expansion Nears Completion
In addition to reporting financial results, REX provided an update on one of its most important growth initiatives—the expansion of ethanol production capacity at the One Earth Energy facility.
According to the company, construction activities associated with the expansion project are approaching completion. The facility is expected to enter testing and commissioning phases once construction is finalized.
Management anticipates that the expanded facility will become fully operational during fiscal 2026.
The expansion is expected to increase ethanol production capacity and improve operating efficiency, strengthening the facility’s competitiveness in the renewable fuels market.
The project represents a significant investment in future growth and positions the company to capitalize on rising demand for lower-carbon transportation fuels and sustainable energy solutions.
Carbon Capture Project Awaits Regulatory Approvals
REX also provided an update on its carbon capture and sequestration (CCS) initiative, which is being developed alongside the One Earth Energy expansion project.
The CCS project remains subject to regulatory approvals, including permits for a Class VI carbon dioxide injection well and an associated carbon dioxide transportation pipeline.
The company stated that it continues to work closely with both the U.S. Environmental Protection Agency (EPA) and the Illinois Commerce Commission as the permitting process moves forward.
Carbon capture and sequestration technologies are becoming increasingly important within the ethanol industry because they can significantly reduce the carbon intensity of ethanol production. Lower-carbon ethanol can qualify for additional incentives and gain access to premium markets focused on emissions reduction.
Successful completion of the CCS project would position REX among a growing group of ethanol producers investing in advanced decarbonization technologies.
Significant Capital Investment Continues
REX has already committed substantial capital toward the combined ethanol expansion and carbon capture initiatives at its Gibson City, Illinois location.
As of the latest reporting period, total capital expenditures associated with these projects reached approximately $176.3 million.
The company continues to estimate total project spending within a range of $220 million to $230 million. However, management noted that these projections remain subject to further refinement as development progresses and as inflationary pressures continue to influence construction and equipment costs.
Despite the significant investment requirements, company leadership believes these projects will enhance long-term competitiveness, improve sustainability performance, and create additional value for shareholders.
Positioning for Long-Term Growth
Looking ahead, REX appears well positioned to benefit from several favorable industry trends, including increasing demand for renewable transportation fuels, expanding carbon reduction initiatives, and supportive government policies aimed at promoting low-emission energy production.
The company’s strong first-quarter earnings performance demonstrates the resilience of its operating model and the benefits of strategic investments in both production efficiency and carbon management technologies.
With the One Earth expansion nearing completion and carbon capture development advancing through the regulatory process, REX is continuing to build a foundation for future growth while strengthening its role in the evolving renewable fuels and low-carbon energy landscape.
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