On August 3, The Andersons Inc. (NASDAQ:ANDE) reported second-quarter results that dwarfed last year’s numbers, with net income attributable to the company climbing to $57 million, or $1.65 per diluted share, from just $7.9 million, or $0.23 per share, a year earlier. Adjusted net income reached $74 million, or $2.15 per share, versus $8.4 million, or $0.24 per share, in the second quarter of 2025. The turnaround leaned almost entirely on one business: renewable fuels.
Fuel Segment Carries The Quarter
Renewables did the heavy lifting. The segment posted a record second-quarter pretax income of $65 million, with the adjusted figure reaching $88 million, on record plant output and strong merchandising execution. Andersons credited its low-carbon strategy for $24 million in 45Z producer tax credits during the quarter, plus the first-quarter finalization of the Renewable Volume Obligations, which firmed up commodity markets and opened trading opportunities for the merchandising desk. Gains in distillers corn oil and RIN pricing also helped. Segment adjusted EBITDA came in at $103 million, more than triple the $30 million posted a year earlier.
Agribusiness improved too, if more modestly, with pretax income of $20 million, both on a GAAP and adjusted basis, up from $17 million in the prior-year quarter. Fertilizer margins strengthened even as volumes fell, and merchandising benefited from higher commodity prices and early-quarter volatility. The company is pushing further into low-carbon fuels, preparing a debottlenecking project at its Clymers, Indiana ethanol plant and advancing a Class VI well permit to capture more 45Z value. A new soybean meal export operation at the Port of Houston is expected online in the fourth quarter. Operating cash flow of $488 million for the quarter, up from $299 million a year earlier, gave the company room to keep funding those projects while holding long-term debt to EBITDA below its 2.5-times target.
Thinner Cash Cushion Than Last Year
The numbers come with caveats. Cash and cash equivalents stood at just $66.5 million at the end of the second quarter, down from $351 million a year earlier, even as short-term debt climbed to $314 million from $104 million. Much of that swing traces to working capital timing and investment spending rather than distress, but it leaves less cushion than the company carried a year ago.
In Agribusiness, the fertilizer and merchandising gains were partly offset by fuel surcharges, a reminder that the segment’s profitability still moves with input costs it does not control. Andersons also warned that a drier stretch across its western growing regions could weigh on grain-asset profits this fall, even though better conditions in the eastern corn belt cut the other way, and that grower economics could limit fertilizer purchasing heading into the fall application season.
Renewables’ strength, meanwhile, leans heavily on policy. The 45Z credits and the boost from the Renewable Volume Obligation finalization are both tied to federal rules that can shift, and this quarter’s 20% effective tax rate was itself a function of non-taxable 45Z income. A full-year adjusted tax rate guided to 14% to 18% assumes those credits keep flowing. If the underlying policy framework moves, the segment’s margin profile would look very different.
Wall Street Weighs A Cheap Multiple
Hedge fund ownership of The Andersons ticked up to 31 funds in the most recent quarter from 29 the quarter before, a modest sign of accumulating conviction. Short interest sits at 4.12% of float, pointing to a limited but real pocket of skepticism rather than a stock under siege. As of September 2, the shares trade at a forward P/E of 20.92, a multiple that assumes the Renewables-driven earnings jump has some staying power. That combination suggests that the market has largely bought into the turnaround already.
A Quarter Built On Momentum
The Andersons enters the second half of 2026 with Renewables doing the heavy lifting and Agribusiness adding a smaller, steadier contribution. The bull case rests on 45Z credits, RVO tailwinds, and export growth continuing to compound, plus new capacity at Clymers and Houston coming online as planned. The bear case rests on how much of that strength is policy-dependent and how thin the cash cushion has become relative to a year ago.
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