The quarter substantially beat the market’s earnings bar. Diluted EPS was $1.06 versus published consensus of roughly $0.42, a $0.64 upside surprise. REX’s $34.9 million of net income attributable to shareholders also compares with $7.1 million a year earlier (Income Statement).
| Metric | Fiscal Q2 2026 | Fiscal Q2 2025 | Market expectation |
|---|---|---|---|
| Net sales and revenue | $168.5M | $158.6M | ~$194.8M |
| Gross profit | $53.3M | $14.3M | — |
| Net income attributable to REX shareholders | $34.9M | $7.1M | — |
| Diluted EPS | $1.06 | $0.22 | ~$0.42 |
| Production tax credit income | $18.4M | — | — |
The headline earnings beat came from both tax credits and better core economics. The company recorded $18.4 million of Section 45Z production tax credit income directly in gross profit, while gross profit still rose 144% excluding that benefit, according to management.
Revenue was the clear weak spot versus expectations. Reported sales of $168.5 million were below the published estimate of approximately $194.8 million, despite higher ethanol, dried distillers grains, and corn oil pricing. Volumes were broadly flat, so the earnings upside was primarily margin- and credit-driven rather than volume-driven (Operating data; Income Statement). REX said revenue growth primarily reflected improved pricing.
The strategic project update adds incremental support but is not entirely new information. Draft EPA permits for three Class VI carbon-injection wells were received on August 17, 2026, before the earnings release, so the regulatory milestone was already public; the remaining catalyst is final permitting and execution. Construction of the One Earth expansion remains on track for commissioning and operation during fiscal 2026, with $191.2 million already invested in the expansion and carbon-capture project.
Net read: a clear earnings beat, but with lower-quality revenue optics and substantial policy support. The EPS surprise is large enough to outweigh the revenue miss in the filing’s overall read, particularly because core gross profit also improved sharply without the tax credit. Still, investors must separate recurring ethanol-margin performance from the $18.4 million 45Z contribution, while cash declined to $91.3 million after $35.0 million of capital spending and heavy short-term-investment purchases (Cash Flow statement; Balance Sheet).
Read the original 8-K on SEC EDGAR ↗