Darling Ingredients (DAR, Financial) announced its financial results for the first quarter of 2025, revealing a revenue of $1.38 billion. This figure fell short of the consensus estimate of $1.46 billion. Despite the revenue miss, the company highlighted the strong performance of its core business segments.
The firm's CEO, Randall C. Stuewe, emphasized the resilience of the company in the face of ongoing challenges within the biofuel sector. He noted that the company's foundational operations were robust, contributing to positive cash flow and maintaining stability amid a turbulent market landscape.
With the biofuel industry undergoing adjustments, Darling Ingredients reported improvements in its profit margins. The company is buoyed by promising developments in renewable fuels policy, which are stimulating solid market demand for domestic fats.
Looking forward, Darling Ingredients is optimistic about its future performance. The company aims to sustain its cash generation capabilities, which will support efforts to reduce leverage on its balance sheet. In addition, the firm plans to opportunistically buy back shares, enhancing shareholder value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for Darling Ingredients Inc (DAR, Financial) is $52.01 with a high estimate of $85.00 and a low estimate of $37.00. The average target implies an upside of 71.37% from the current price of $30.35. More detailed estimate data can be found on the Darling Ingredients Inc (DAR) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Darling Ingredients Inc's (DAR, Financial) average brokerage recommendation is currently 1.6, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Darling Ingredients Inc (DAR, Financial) in one year is $51.41, suggesting a upside of 69.39% from the current price of $30.35. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Darling Ingredients Inc (DAR) Summary page.
DAR Key Business Developments
Release Date: February 06, 2025
- Revenue: $1.4 billion for Q4 2024, down from $1.6 billion in Q4 2023.
- Net Income: $101.9 million for Q4 2024, up from $84.5 million in Q4 2023.
- Earnings Per Share (EPS): $0.63 per diluted share for Q4 2024, compared to $0.52 in Q4 2023.
- Operating Income: $122.4 million for Q4 2024, down from $158.8 million in Q4 2023.
- Net Sales for Fiscal Year 2024: $5.7 billion, compared to $6.8 billion in 2023.
- Net Income for Fiscal Year 2024: $278.9 million, compared to $647.7 million in 2023.
- Gross Margin Improvement (Feed Segment): Increased from 21.5% in Q3 to 22.6% in Q4 2024.
- Gross Margin Improvement (Food Segment): Increased from 23.9% in Q3 to 25.7% in Q4 2024.
- Debt Reduction: Paid down $353 million in fiscal year 2024, reducing total debt to $4 billion.
- Adjusted EBITDA: $289.5 million for Q4 2024.
- Cash Dividends from Diamond Green Diesel: $68.6 million in Q4 2024, $179.8 million for the full fiscal year.
- Capital Expenditures: $73.3 million in Q4 2024, $332.5 million for fiscal year 2024.
- Income Tax Benefit: $25.5 million for Q4 2024, primarily due to biofuel tax incentives.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Darling Ingredients Inc (DAR, Financial) delivered its strongest quarter of the year in 2024, with a focus on effective margin management and CapEx stewardship.
- The company paid down $353 million in debt, reducing its financial leverage ratio to 3.68 times.
- Darling Ingredients received $179.8 million in dividends from Diamond Green Diesel and successfully started up the largest sustainable aviation fuel unit in the world under budget and ahead of schedule.
- The company achieved a significant improvement in global safety records, marking an all-time record for their global team.
- The regulatory environment is improving, with clarity on the 45Z clean fuel production tax credit, providing a positive outlook for future operations.
Negative Points
- Net sales for the fourth quarter of 2024 were $1.4 billion, a decrease from $1.6 billion in the fourth quarter of 2023.
- Operating income decreased by $36.4 million to $122.4 million for the fourth quarter of 2024 compared to the same period in 2023.
- The company experienced a lower gross margin due to significantly lower fat prices, impacting overall financial performance.
- Net income for fiscal year 2024 was $278.9 million, a significant drop from $647.7 million in fiscal 2023.
- The company faced challenges with foreign currency losses, which offset some of the benefits from lower interest expenses and increased property insurance recoveries.
