Ingredion Incorporated

Second-quarter net sales were $1.85 billion, up 1% year over year, driven by $36 million of favorable foreign exchange and $20 million of higher volume, partly offset by $39 million of unfavorable price/mix. Reported operating income was $188 million and adjusted operating income was $258 million, down 5% year over year. Adjusted diluted EPS declined $0.05 year over year. For the first half, net sales were approximately $3.6 billion, flat year over year, with reported and adjusted operating income of $391 million and $470 million, down 29% and 14%, respectively. For 2026, the company reaffirmed adjusted EPS of $10.30 to $10.90, expects net sales to be flat to up low single digits, adjusted operating income to be down mid-single digits, cash from operations of $700 million to $800 million, and capex of $450 million to $490 million. Third-quarter 2026 guidance calls for net sales up low single digits and adjusted operating income down mid-single digits.

Jim Zallie framed the quarter as in line with expectations and emphasized that the core growth engine remains Texture & Healthful Solutions, where volume growth, innovation activity and solutions-led selling continue to gain traction. He highlighted progress at Argo, saying reliability and production improved sequentially and that the plant was operating at normal production rates by the end of June. His tone was constructive and strategic, with a strong focus on portfolio reshaping, innovation, and the pending Tate & Lyle acquisition as a transformational step toward higher-value solutions.

Jason Payant said adjusted operating income declined because of Argo manufacturing issues, foreign exchange, and macro headwinds in Mexico, partially offset by strong Texture & Healthful Solutions performance. He quantified Q2 drivers: $36 million of favorable FX, $20 million of higher volume, and $39 million of unfavorable price/mix, with T&HS up 5% in sales and operating income and LATAM operating income down 7% to $118 million with a 19.3% margin. He also noted year-to-date cash from operations of $123 million after about $231 million of working capital investment, $210 million of capex, $105 million of dividends, and $14 million of share repurchases, and said guidance assumes 63 million to 64 million diluted shares, including completion of $100 million of buybacks this year.

Analysts focused heavily on Argo, asking how much incremental improvement remains, what margins look like now, and whether the 2026 and 2027 outlooks should be adjusted for lingering disruption. Management said the facility’s major issues have been addressed, margins improved sequentially, and the plant should return to normal historical margins toward the end of the year, though some inventory flow-through and network rebalancing will linger into next year. Questions also covered tapioca inflation, pricing pass-through, and the durability of T&HS growth; management said tapioca price increases typically take 1 to 1.5 quarters to pass through, the non-tapioca inflation hit from Middle East-related disruption is only a few million dollars, and T&HS growth is being driven by structural demand trends rather than restocking.