On September 2, REX American Resources (NYSE:REX) reported the best second quarter in its history, with net income of $1.06 per diluted share, marking the company's 24th straight profitable quarter. The ethanol producer leaned on stronger crush margins, richer byproduct pricing, and $18.4 million in federal tax credits to turn last year's thin quarter into a blowout one. But dig past the headline number and the story gets more complicated, with volume growth stalling and one regulatory approval standing between REX and its next big project.
Profits Pile Up, Debt Stays Zero
Net sales climbed to $168.5 million as REX captured better pricing across nearly every product line. Ethanol sold for $1.78 a gallon, up from $1.75 a year earlier, while dried distillers grains jumped to $166.55 a ton from $143.63 and distillers corn oil rose to 72 cents a pound from 54 cents. Gross profit surged to $53.3 million from $14.3 million, and even stripping out the $18.4 million in Section 45Z tax credit income, core gross profit still grew 144% year over year. That is a meaningful detail, since it shows the improvement is not entirely a function of a federal incentive program.
REX ended the quarter wi...