Headline: Darling Ingredients Falls Short of Q3 Expectations, Shares Drop 7%

IRVING, Texas - Darling Ingredients Inc. (NYSE:DAR) reported third-quarter earnings below analyst expectations, causing shares to drop 7% in pre-market trading on Thursday. The company's performance was impacted by declining fat prices and lower earnings from the Diamond Green Diesel (DGD) joint venture.

Darling Ingredients reported earnings of $0.11 per share for the third quarter, falling short of analyst expectations of $0.47 per share by $0.36. Revenue came in at $1.4 billion, below the consensus estimate of $1.49 billion, and decreased from $1.6 billion in the same quarter last year. The company attributed the revenue decline to a drop in finished product prices.

Quarterly net income was $16.9 million, a significant decrease from $125.0 million in Q3 2023. Combined adjusted EBITDA fell from $334.3 million to $236.7 million year-over-year.

Chairman and CEO Randall C. Stuewe stated, "In the third quarter, Darling Ingredients navigated challenging markets. Despite these adverse conditions, cash flows from our core ingredients and dividends from DGD allowed us to reduce our debt by approximately $192 million."

The company's DGD joint venture sold 316.6 million gallons of renewable diesel at an average EBITDA of $0.25 per gallon in the third quarter. Darling Ingredients received $111.2 million in cash dividends from DGD during the quarter.

Looking ahead, Darling Ingredients expects full-year combined adjusted EBITDA to range between $1.15 billion and $1.175 billion. The company anticipates improved performance in 2025, considering factors such as the commissioning of a sustainable aviation fuel plant and a developing regulatory environment that supports waste oils as feedstock in renewable fuels.