Investing.com -- Shares of Ingredion (NYSE: NYSE:INGR) tumbled 6% after the company reported fourth-quarter revenue that fell short of Wall Street expectations. Despite a better-than-expected earnings per share (EPS), the revenue miss has raised concerns among investors.
Ingredion posted an EPS of $2.63 for the fourth quarter, which was $0.10 higher than the analyst consensus of $2.53. However, the company’s revenue for the quarter was reported at $1.8 billion, not meeting the consensus estimate of $1.82 billion. This shortfall in revenue compared to both analyst expectations and the $1.921 billion reported in the same quarter the previous year has contributed to the stock’s decline.
The company also provided its full-year 2025 EPS guidance, projecting a range of $10.75 to $11.55, which brackets the consensus estimate of $11.12. Despite this outlook and the reported full-year 2024 EPS of $10.65 compared to $9.42 in 2023, investor sentiment has been dampened by the revenue miss.
Ingredion’s performance in 2024 reflected a complex business environment. The company benefited from approximately $400 million in favorable changes in working capital balances due to lower corn costs and returned $426 million to shareholders through dividends and share repurchases. Jim Zallie, president and CEO of Ingredion, highlighted the company’s record Q4 financial results, driven by strong sales volume growth in Texture & Healthful Solutions and exceptional results in the Food & Industrial Ingredients segments in the U.S./Canada and Latin America.
Despite these positive notes, the full-year net sales for 2024 decreased by 9% compared to the previous year, primarily due to price mix changes, the sale of the South Korea business, and foreign exchange impacts. Operating income also saw a decline in the fourth quarter, attributed to impairment charges related to the cessation of operations at certain manufacturing facilities.
CFRA analyst Arun Sundaram provided a more optimistic view, stating, "We believe INGR’s strong momentum and profitability growth can continue into 2025." Sundaram raised the 12-month target price for Ingredion to $174 from $143 and increased the 2025 EPS estimate to $11.58, up from the previous $10.62.
Investors will be watching closely to see if Ingredion can leverage its strategic initiatives and operational excellence to overcome the challenges reflected in the fourth-quarter revenue and steer the company back towards growth in the upcoming fiscal year.
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