Ingredion Inc. cut its 2026 earnings outlook and reported a 28 percent drop in first-quarter net income after production failures at its Argo plant in Bedford Park, Illinois destabilized sweetener output and forced costly recovery efforts.
The company earned $142 million, or $2.25 per share, in the quarter ended March 31, down from $197 million, or $3.05 per share, a year earlier. Sales fell 1 percent to $1.79 billion.
The Argo facility, Ingredion's largest sweetener plant, accounted for a $40 million hit to first-quarter results. The company had flagged $10 million to $15 million of costs tied to the recovery, but operational challenges slowed the rebound and inflated inventory rework, forcing higher maintenance and elevated logistics costs as the company sourced products from other facilities to meet customer demand.
CEO James Zallie said on a May 5 conference call that the company assembled "a multidisciplinary team of internal and external experts" to diagnose the failures. By quarter end, downstream production had returned to normal. But on April 10, an isolated thermal event knocked crude oil production offline in the corn germ processing unit. The company expects to restore germ processing capabilities during the second quarter.
Revised outlook
Ingredion now expects adjusted earnings of $10.45 to $11.15 per share for 2026, down from the prior range of $11 to $11.80. The company also narrowed sales guidance to flat to low single-digit growth, versus its earlier projection of low to mid-single-digit growth.
Texture segment holds steady
The Texture and Healthful Solutions segment posted operating income of $100 million, up 1 percent, on sales of $617 million, up 2 percent. Growth came from broad-based volume gains and favorable input costs and foreign exchange, offset partly by price and mix management.
Pea protein isolates saw a 50 percent sales jump on new product innovations, while stevia-based solutions climbed 6 percent. Solutions products now represent approximately 40 percent, or roughly $1 billion, of the segment's revenue. Clean label offerings remain a growth driver, Zallie said, with customer demand persisting "even against a challenging volume backdrop."
Food and Industrial Ingredients falters
Operating income in the Food and Industrial Ingredients segment for the U.S. and Canada plummeted 63 percent to $34 million from $92 million a year prior, as sales fell 9 percent to $475 million. The declines reflected production challenges at Argo and softer volumes and mix.