What happened
Shares of Darling Ingredients (DAR +0.24%) were up 13.4% as of noon EST Wednesday after the rendering and biodiesel specialist released strong fourth-quarter 2016 results.
So what
Quarterly revenue climbed 9.6% year over year, to $887.3 million, and translated to a 52% decline in net income attributable to Darling, to $40.5 million, or $0.25 per share. But that decline was primarily due to the inclusion of the blenders tax credit in its entirety in the fourth quarter of 2015. The same tax credit was reported as earned in each quarter of 2016.
For additional perspective -- as Darling doesn't provide quarterly guidance, and though we don't usually pay close attention to Wall Street's short-term demands -- analysts' consensus estimates called for revenue of just $841.5 million, and net income attributable to Darling of $0.18 per share.
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Darling Ingredients CEO Randall Stuewe elaborated:
We closed out 2016 with a solid performance across all product lines. We executed on our strategy of de-levering and growing, paying down $169.7 million in debt while commissioning four new factories and expanding five others. We carry nice momentum and a larger platform into 2017.
Now what
Darling also confirmed it remains on track for the planned second-quarter 2018 completion of the previously announced expansion of its Diamond Green Diesel (DGD) joint venture with Valero (VLO +2.31%). Engineering and construction planning is ongoing, with long lead time equipment ordered for DGD that will increase annual production by over 70%, to 275 million gallons.
In the end, given Darling's broad-based segment strength, continued debt reduction, and continued success implementing its growth initiatives, it's no surprise to see shares approaching a fresh 52-week high today.
