Darling Ingredients Posts Q4 Earnings Beat, Stock Rises on Strong Margins and Volume Growth

Darling Ingredients (DAR) delivered a stronger-than-anticipated fourth-quarter performance, with adjusted EBITDA reaching $187 million, up 12% from the same period last year. Revenue totaled $672 million, marking a 9% increase year-over-year, fueled by volume growth in both its specialty ingredients and renewable fuels divisions. The company reported a 1.7% improvement in gross margin, reflecting effective cost management and favorable pricing in its animal byproduct processing business. The results were supported by a 13% increase in sales volume for animal proteins, particularly in feed and pet food applications, while renewable diesel output rose 15% due to expanded capacity at its facilities in the U.S. and Europe. Management attributed the performance to sustained demand from food manufacturers and increasing demand for low-carbon transportation fuels, which aligns with ongoing regulatory push for decarbonization. Shares in Darling Ingredients gained 6.3% in after-hours trading following the release, reflecting investor confidence in the company’s margin resilience and its ability to scale operations amid fluctuating commodity prices. The stock's move was partly supported by a 3% decline in crude oil prices (CL=F), which reduced input costs for renewable fuels, enhancing profitability in that segment. The company’s infrastructure-focused ETF, XLRE, also saw a modest uptick, as investors reassessed the value of industrial and commodity-linked equities amid shifting energy markets. While the broader market remained range-bound, Darling’s results underscored the potential for mid-cap specialty manufacturers to outperform in niche, supply-constrained sectors.