Core Viewpoint - Ingredion reported quarterly earnings of $2.75 per share, exceeding the Zacks Consensus Estimate of $2.73 per share, but down from $3.05 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +0.73%, and the company had previously delivered a surprise of +3.24% with earnings of $2.87 per share against an expectation of $2.78 [2] - Revenues for the quarter were $1.82 billion, missing the Zacks Consensus Estimate by 2.31%, and down from $1.87 billion year-over-year [3] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates but has not beaten revenue estimates [3] Stock Performance and Outlook - Ingredion shares have declined approximately 17% since the beginning of the year, contrasting with a 16.5% gain in the S&P 500 [4] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $2.53 for the upcoming quarter and $11.10 for the current fiscal year [5][8] - The Zacks Rank for Ingredion is currently 5 (Strong Sell), indicating expected underperformance in the near future [7] Industry Context - The Food - Miscellaneous industry, to which Ingredion belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Comparatively, TreeHouse Foods, another company in the same industry, is expected to report a year-over-year earnings decline of 28.4% in its upcoming results [10]

Financial Performance - Third quarter 2025 reported and adjusted operating income decreased by 7% and 10% compared to the third quarter 2024[5] - Third quarter 2025 reported diluted EPS was $2.61, down from $2.83 in the same quarter last year, while adjusted diluted EPS was $2.75, down from $3.05[6] - Third quarter net sales decreased by 3% year-over-year to $1.816 billion, driven by lower volume from F&II segments and price mix[8] - Food & Industrial Ingredients–U.S./Canada segment operating income decreased by 18% to $81 million, primarily due to production challenges and lower consumer demand[17] - Net income attributable to Ingredion for the three months ended September 30, 2025, was $171 million, a decrease of 9% from $188 million in 2024[38] - Earnings per share (EPS) for the three months ended September 30, 2025, were $2.66, down 8% from $2.88 in the same period of 2024[38] - Total operating income for the nine months ended September 30, 2025, was $796 million, an increase of 10% from $721 million in the same period of 2024[53] Sales and Segment Performance - Texture & Healthful Solutions segment achieved 4% sales volume growth, with double-digit increases in clean label ingredient solutions in U.S./Canada and Asia-Pacific[4] - Ingredion's net sales for the three months ended September 30, 2025, were $1.816 billion, a decrease of 3% compared to $1.870 billion in the same period of 2024[38] - Texture & Healthful Solutions segment reported net sales of $605 million in Q3 2025, a 1% increase from $600 million in Q3 2024[43] - LATAM Food & Industrial Ingredients segment saw a 6% decline in net sales to $585 million in Q3 2025 from $620 million in Q3 2024[43] - U.S./Canada Food & Industrial Ingredients segment reported net sales of $507 million, down 7% from $548 million in Q3 2024[43] Guidance and Projections - Full-year 2025 reported EPS guidance adjusted to a range of $11.11 to $11.31, with adjusted EPS expected between $11.10 and $11.30[21] - Full-year 2025 net sales are expected to be flat to down low single-digits, reflecting volume growth in Texture & Healthful Solutions offset by lower price mix[22] - The expected GAAP EPS for full-year 2025 is projected to range from $11.11 to $11.31[57] - The expected adjusted EPS for full-year 2025 is projected to range from $11.10 to $11.30[57] - The expected GAAP effective income tax rate for full-year 2025 is projected to range from 25.5% to 26.5%[59] - The expected adjusted effective income tax rate for full-year 2025 is projected to range from 26.0% to 27.0%[59] Cash Flow and Capital Expenditures - Cash from operations for full-year 2025 is projected to be between $800 million and $900 million, with capital expenditures expected around $400 to $425 million[26] - Cash provided by operating activities for the nine months ended September 30, 2025, was $539 million, a decrease from $1 billion in 2024[41] - Capital expenditures for the nine months ended September 30, 2025, were $298 million, compared to $170 million in 2024[41] - Cash and cash equivalents at the end of the period on September 30, 2025, were $915 million, down from $997 million at the beginning of the period[41] Debt and Assets - Total debt as of September 30, 2025, was $1.8 billion, with cash and short-term investments totaling $921 million[20] - Total assets as of September 30, 2025, were $7.833 billion, an increase from $7.444 billion as of December 31, 2024[40] - Ingredion's total liabilities as of September 30, 2025, were $3.509 billion, a slight decrease from $3.554 billion as of December 31, 2024[40] Other Financial Metrics - For the three months ended September 30, 2025, the income before income taxes was $241 million, with an effective tax rate of 28.6%[55] - The adjusted non-GAAP income before income taxes for the same period was $246 million, reflecting an effective tax rate of 26.4%[55] - For the nine months ended September 30, 2025, the income before income taxes was $767 million, with an effective tax rate of 25.8%[55] - The adjusted non-GAAP income before income taxes for the nine months ended September 30, 2025, was $771 million, with an effective tax rate of 26.3%[55] Dividends - The company paid $54 million in dividends during the third quarter and declared a quarterly dividend of $0.82 per share, marking the 11th consecutive annual increase[21] Restructuring and Impairment - Restructuring and resegmentation costs are expected to contribute $0.09 to the adjusted EPS for full-year 2025[57] - Impairment charges are expected to contribute $0.06 to the adjusted EPS for full-year 2025[57]

Core Insights - Ingredion Incorporated reported its third quarter results for 2025, highlighting a mixed performance across its business segments, with a notable decline in earnings per share compared to the previous year [1][6]. Financial Performance - The company reported diluted earnings per share (EPS) of $2.61 for Q3 2025, down from $2.83 in Q3 2024, reflecting a decrease of 8% [4][6]. - Adjusted diluted EPS also fell to $2.75 from $3.05, marking a 10% decline year-over-year [4][6]. - Reported operating income decreased by 7% to $249 million, while adjusted operating income fell by 10% to $254 million compared to the same quarter last year [10][46]. Segment Performance - The Texture & Healthful Solutions segment achieved 4% sales volume growth, driven by double-digit increases in clean label ingredient solutions in the U.S./Canada and Asia-Pacific [2][3]. - The Food & Industrial Ingredients—U.S./Canada segment saw an 18% decline in operating income, primarily due to production challenges at a major facility and reduced consumer demand [3][17]. - The Food & Industrial Ingredients—LATAM segment's operating income decreased by 11%, impacted by lower brewing industry demand and a challenging economic environment [3][15]. Sales and Revenue - Total net sales for Q3 2025 were $1.816 billion, a 3% decrease from $1.870 billion in Q3 2024, driven by lower volumes across the F&II segments [7][45]. - Year-to-date net sales also declined by 3%, totaling $5.462 billion compared to $5.630 billion in the previous year [7][45]. Strategic Outlook - The company plans to continue investing in organic growth opportunities and mergers and acquisitions to strengthen its Texture & Healthful Solutions portfolio [3][21]. - Full-year 2025 guidance for reported EPS is projected to be in the range of $11.11 to $11.31, with adjusted EPS expected between $11.10 and $11.30 [21][23]. Shareholder Returns - In Q3 2025, Ingredion paid $54 million in dividends and declared a quarterly dividend of $0.82 per share, marking the 11th consecutive annual increase [20][21]. - The company repurchased $134 million in common stock year-to-date through September 30, 2025 [20].

Core Insights - Global equity markets experienced broad positive returns in Q3 2025, driven by resilient corporate earnings, enthusiasm for AI, and the U.S. Federal Reserve's first interest rate cut of the year [3][21] - Emerging markets, particularly China, led the gains, supported by a U.S. trade truce and strength in the tech sector [3][4] - The Polaris Global Equity Composite gained 5.04% (net of fees) for the quarter, underperforming the MSCI World Index, which returned 7.36% [5][6] Market Performance - Developed markets saw weaker currencies benefiting export-oriented indices, with Japan's TOPIX Index up 11.0% and the U.K.'s FTSE All-Share Index up 6.9% [4] - The U.S. market, represented by the S&P 500 Index, gained over 8%, primarily due to tech and communication stocks [4] - France and Germany underperformed due to geopolitical and fiscal concerns, with tepid growth projections under new U.S. trade policy [4] Sector Analysis - The healthcare sector was the best performer, with notable gains from pharmaceutical stocks, while financials, consumer discretionary, and IT also contributed positively [5][6] - Health insurers faced challenges, with UnitedHealth Group and CVS Health posting over 10% returns, while Elevance Health's shares dropped sharply due to profit guidance cuts [7] - In IT, Samsung Electronics excelled with strong performance in HBM technology and a significant deal with Tesla for AI chip manufacturing [11] Company Highlights - United Therapeutics Corp. was a top contributor to portfolio performance, driven by positive clinical trial results for its drug Tyvaso, potentially adding $4-5 billion in peak sales [6] - AbbVie, Inc. expects high single-digit revenue growth through 2029, with flagship drugs projected to exceed $31 billion in sales by 2027 [6] - The Carlyle Group Inc. outperformed in the financial sector, up over 20% due to strong fee-based credit and secondaries business [8] Investment Strategy - The current economic environment is characterized by a "two-speed" economy, with a concentrated AI-driven boom amidst subdued growth in other sectors [21][22] - Financials are seen as attractive due to stable net interest margins and loan growth, while defensives like consumer staples and healthcare are expected to perform well [22] - Opportunities in economically-sensitive sectors are being explored, with a focus on industrials benefiting from AI integration and supply chain modernization [22][23]

Industry Overview - The agricultural and food industries are undergoing a transformation driven by technology, sustainability, and changing consumer preferences, with innovation becoming a key competitive advantage [1] - The global population growth and climate volatility are challenging food production, necessitating advancements from farm to factory [1] Agricultural Technology (AgTech) - AgTech is central to the transition, utilizing artificial intelligence, robotics, and precision-farming systems to optimize yields while reducing resource use [2] - Companies like Deere & Company are shifting from traditional machinery to precision-agriculture platforms, integrating connected equipment, analytics, and automation [2] Food Innovation - Consumer demand for plant-based, fermented, and lab-grown proteins is increasing as health and environmental concerns rise, with Beyond Meat being a prominent player despite facing cost pressures [3] - Ongoing investments in R&D and product reformulation are helping companies maintain market relevance [3] Supply Chain Modernization - Technological integration, including blockchain and IoT, is enhancing transparency and safety in the food supply chain, while automation is reducing costs and waste [4] - These efficiencies are crucial for food companies aiming to meet sustainability goals in a high-cost environment [4] Key Players in AgTech and Food Innovation - Tyson Foods is focusing on innovation and sustainability, enhancing production systems through digital transformation, automation, and data analytics [7] - The company is investing in ag tech ventures like Future Meat Technologies and Memphis Meats to prepare for a future with cleaner food systems [8] - Tyson Foods is also evolving its product lineup with plant-based options and a $100 million modernization program in its Chicken business [9] Ingredion's Strategy - Ingredion is positioned at the intersection of agriculture and food science, focusing on clean-label and plant-based ingredients to meet consumer demand [10] - Collaborations with startups and the Ingredion Idea Labs are central to its innovation strategy, accelerating the development of healthier food solutions [12] - Sustainability and regenerative agriculture are core to Ingredion's strategy, enhancing soil health and resource efficiency while lowering environmental footprints [13] Hydrofarm's Focus - Hydrofarm is a leader in controlled environment agriculture, implementing a restructuring plan to focus on high-margin consumables [14] - The company’s product lines, such as SunBlaster LED lights, are designed for energy efficiency and support modern food resilience [15] - Hydrofarm is leveraging digital tools for operational efficiency and has diversified into various food innovation applications [16]

Core Insights - Ingredion Incorporated will release its third quarter 2025 financial results on November 4, 2025, before market opens [1] - A conference call will be hosted by the CEO and CFO on the same day at 8 a.m. CT to discuss financial performance [2] - Ingredion is a leading global provider of ingredient solutions with annual net sales of approximately $7.4 billion in 2024 [3] Company Overview - Ingredion is headquartered in the suburbs of Chicago and serves customers in over 120 countries [3] - The company specializes in turning grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for various markets [3] - Ingredion operates innovation centers called Idea Labs and employs more than 11,000 people [3]

Core Insights - Ingredion Incorporated has appointed Patrick Kalotis as executive vice president of Global Texture & Healthful Solutions, effective December 1, 2025, reporting to CEO Jim Zallie [1][2][3] Company Overview - Ingredion is a leading global provider of ingredient solutions for the food and beverage industry, with annual net sales of approximately $7.4 billion in 2024, serving customers in nearly 120 countries [6] Leadership and Strategy - Kalotis will be responsible for the business strategy and performance of the Texture & Healthful Solutions segment, focusing on commercial and financial performance while collaborating with Global Innovation and Global Commercial Excellence [2][3] - Jim Zallie highlighted Kalotis's strengths in market growth and profit expansion as essential for leading the segment, along with his extensive consumer packaged goods (CPG) knowledge [3][4] Background of Patrick Kalotis - Kalotis previously served as CEO of APP Group and has held leadership roles at Tropicana Brands Group, Danone, Coca-Cola, Mars, and Unilever [4] - He holds a master's degree in mechanical engineering and business, and a bachelor's degree in mechanical engineering from the University of Warwick, along with a diploma in business management from Henley Business School [5]

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a particular interest in metals and mining stocks, while also being comfortable with consumer discretionary, REITs, and utilities [1]

Group 1 - Crude Value Insights provides an investment service and community focused on the oil and natural gas sectors, emphasizing cash flow and companies that generate it [1] - The service offers subscribers access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Group 2 - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas market [2]

Group 1: Hormel Foods Corp. - Hormel Foods Corp. is known for its products like ham and bacon, but it owns around 40 brands and sells in approximately 80 countries [4] - The stock experienced a 17% decline in the third quarter due to rising costs for pork and beef, which are impacting profit margins [4] - At a recent price of about $25, the stock trades at 1.1 times revenue and 2.7 times book value, which are considered attractive multiples [4][5] - Despite Wall Street's lack of enthusiasm, with only two out of twelve analysts rating it a "buy," the company has a strong historical record, having never posted a loss since going public in 1928 [5] Group 2: Amdocs Ltd. - Amdocs Ltd. provides software and services primarily to communications and entertainment companies, with a significant historical reliance on AT&T as a customer [6] - The stock fell over 9% in the latest quarter, but six out of seven analysts covering it recommend buying [6] - Revenue decreased by about 3% over the past year due to shedding low-margin businesses, while earnings increased [7] Group 3: Eastman Chemical Co. - Eastman Chemical Co. shares fell 17% in the recent quarter, attributed to signs of a slowing economy [10] - Insider purchases were noted, with the CEO and CFO increasing their stakes, indicating confidence in the company's long-term prospects [9] Group 4: LKQ Corp. - LKQ Corp. recycles auto parts and operates around 1,500 high-tech junkyards in the U.S. and Europe [11] - The stock declined nearly 17% in the past quarter, with sales and earnings missing expectations, particularly in European operations [12] - The expectation is that rising car prices in the U.S. due to tariffs may lead consumers to keep their cars longer, benefiting the recycled-parts business [11] Group 5: Ingredion Inc. - Ingredion Inc. produces ingredients for foods and beverages, with a focus on sweeteners [13] - Despite a revenue dip in the past year, earnings remained strong, yet the stock fell 9% last quarter [13] - The company has achieved a return on stockholders' equity of 15% in 11 of the past 15 years, and the stock is considered cheap at 12 times earnings [13]