ANDE earnings analysis
What we found in ANDE's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
The Andersons' Q2 earnings and profitability improved materially: GAAP EPS reached $1.65 versus $0.23 a year earlier, with gross margin expanding 217 basis points to 7.22%, despite revenue declining 1.2% to $3.098 billion. Renewables was the principal driver, supported by strong ethanol margins, $24.2 million of clean fuel production credits, and improved merchandising, while Agribusiness improved gross profit despite lower sales. Liquidity remains an area to monitor, as cash declined to $66.5 million, short-term debt increased to $314.4 million, and Skyland required a covenant waiver.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue modestly lower year over year
- Q2 revenue was $3.098 billion, down $38.2 million, or 1.2%, from $3.136 billion a year ago, but increased $467.7 million, or 17.8%, from $2.630 billion in Q1 2026. Management notes commodity-price changes generally affect sales and cost of sales similarly, making gross profit more indicative of performance.
- Margins expanded sharply
- Gross profit increased to $223.7 million from $158.4 million, lifting gross margin to 7.22% from 5.05% a year ago (+217 basis points). Operating income, calculated as gross profit less operating, administrative and general expense, rose to $50.0 million from $23.8 million, lifting operating margin to 1.61% from 0.76%.
- EPS rose substantially
- GAAP diluted EPS was $1.65, up $1.42 from $0.23 in Q2 2025 and up $0.68 from $0.97 in Q1 2026. Income before taxes rose to $67.3 million from $24.8 million, while the effective tax rate fell to 19.9% from 32.3%.
- Renewables delivered the earnings step-up
- Renewables gross profit rose $50.6 million to $77.0 million. Management attributed the gain principally to a $40.8 million increase in ethanol-plant earnings, a $9.0 million merchandising gross-profit gain, and $24.2 million of clean fuel production credits in other income.
- Agribusiness improved profitability
- Agribusiness gross profit rose $14.7 million to $146.8 million despite a $301.7 million sales decline. The improvement included a $9.8 million merchandising improvement, while portfolio optimization reduced participation in underperforming merchandising businesses.
- Operating cash flow turned positive
- First-half operating cash flow improved to an inflow of $94.2 million from an outflow of $50.7 million, a $144.9 million favorable swing. The company used $123.3 million in investing activities, including $31.9 million more capital expenditures for growth initiatives than in the prior-year period.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Skyland covenant breach required a waiver
- Skyland was not compliant with its debt-service-coverage covenant at June 30, 2026, though it subsequently obtained a lender waiver. Skyland had $149.3 million of short-term borrowings and $81.4 million of term debt outstanding; management expects compliance with amended covenants over the next 12 months.
- Liquidity cushion and cash balance declined
- Working capital declined $392.1 million year over year to $702.7 million as cash fell $284.4 million to $66.5 million and short-term debt rose $209.9 million to $314.4 million. Management cites the TAMH acquisition and increased 2026 market volatility as drivers.
- Impairment and litigation costs increased
- Renewables incurred $10.6 million of impairment charges for capitalized engineering and design costs and $11.6 million of litigation expense tied to the receivership of a former consolidated subsidiary. These items contributed to a $25.1 million increase in segment operating, administrative and general expense.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.65
- Gross margin
- 7.22%
- Operating margin
- 1.61%
- Segment
- Agribusiness: revenue $2.113 billion, down $301.7 million year over year; gross profit $146.8 million, up $14.7 million.
- Segment
- Renewables: revenue $984.6 million, up $263.5 million year over year; gross profit $77.0 million, up $50.6 million.
What they said about what is next.
No explicit revenue or EPS outlook was provided in the 10-Q. Management expects approximately $225 million of 2026 property, plant and equipment investment, roughly 50% growth capital and 50% maintenance capital; it anticipates supportive ethanol demand and renewable-fuel markets.
The filing reads better than the one before it.
What came before.
- 10-Q · May 6, 2026
- The Andersons, Inc. reported a solid Q1 2026 performance with a record EPS of $1.12, significantly beating estimates of $0.70. However, revenue of $2.63 billion was slightly below expectations of $2.71 billion, driven…
- 10-K · February 18, 2026
- The Andersons presents a two-segment strategy (Agribusiness and Renewables) focused on asset-backed grain handling, specialty nutrients and fully owned ethanol operations after completing the July 31, 2025 acquisition…
- 10-Q · August 5, 2025
- The Andersons reported Q2 sales of $3,135,869 (thousands), up 12.2% year-over-year, but gross profit and margins compressed and diluted EPS fell to $0.23 from $1.05 a year ago. Operating cash flow for the six months…
- 10-Q · May 7, 2025
- The Andersons reported Q1 sales of $2.659B and gross profit of $152.9M (5.8% gross margin) while diluted EPS collapsed to $0.01 from $0.16 a year ago. Operating cash flow was negative $350.0M and free cash flow was…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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