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Will Alto Ingredients' Higher Maintenance Costs Pressure Margins?
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Key Takeaways
Alto Ingredients' Q2 gross profit rose to $16.6M from a $1.9M loss despite higher maintenance costs.
Stronger industry crush margins added about $17M of incremental gross profit in the quarter.
Repairs and maintenance rose about $2M year over year for planned outages and Carbonic reliability work.
Alto Ingredients, Inc. (ALTO - Free Report) faced higher repairs and maintenance costs in the second quarter of 2026, partially offsetting the improvement in gross profit. The company incurred approximately $2 million more in repairs and maintenance expenses year over year, reflecting the planned outage at the Pekin dry mill, the routine spring outage at ICP and continued work at its Carbonic facility. The latter was aimed at ensuring reliable operations to support increased demand for premium CO2 during the seasonally strong summer months.
The higher spending came during a quarter in which Alto Ingredients’ gross profit improved to $16.6 million from a gross loss of $1.9 million a year earlier. Stronger industry crush margins were the biggest contributor to the improvement, adding about $17 million of incremental gross profit. Lower utility costs also helped, with natural gas and electricity expenses declining nearly $600,000 year over year.
However, these gains were partly offset by higher repairs and maintenance expenses. The added costs reflected planned work at the Pekin dry mill and ICP, along with continued reliability work at the Carbonic facility to support increased demand for premium CO2 during the seasonally strong summer months.
Even with the higher repairs and maintenance expense, Alto Ingredients’ Western facilities remained profitable on a gross-profit basis in the second quarter. The results indicate that stronger crush economics and lower utility costs were sufficient to absorb the added maintenance burden during the period, although the higher spending still acted as a partial offset to the broader improvement in gross profit.
What Do the Latest Metrics Say About Alto Ingredients?
Alto Ingredients, which competes with Green Plains Inc. (GPRE - Free Report) and Aemetis, Inc. (AMTX - Free Report) , has seen its shares fall 16.3% in the past month, underperforming the industry’s 5.6% growth. Shares of Aemetis have risen 22.4%, while Green Plains has declined 11.9% during the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, Alto Ingredients’ forward price-to-sales ratio of 0.32 is lower than the industry’s average of 3.36. The company is also trading at a discount to Green Plains (with a forward price-to-sales ratio of 0.54) and Aemetis (0.40).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Alto Ingredients’ 2026 and 2027 earnings per share has declined 27.8% and 66.3% to 39 cents and 28 cents, respectively, in the past 30 days.
Alto Ingredients currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Will Alto Ingredients' Higher Maintenance Costs Pressure Margins?
Key Takeaways
Alto Ingredients, Inc. (ALTO - Free Report) faced higher repairs and maintenance costs in the second quarter of 2026, partially offsetting the improvement in gross profit. The company incurred approximately $2 million more in repairs and maintenance expenses year over year, reflecting the planned outage at the Pekin dry mill, the routine spring outage at ICP and continued work at its Carbonic facility. The latter was aimed at ensuring reliable operations to support increased demand for premium CO2 during the seasonally strong summer months.
The higher spending came during a quarter in which Alto Ingredients’ gross profit improved to $16.6 million from a gross loss of $1.9 million a year earlier. Stronger industry crush margins were the biggest contributor to the improvement, adding about $17 million of incremental gross profit. Lower utility costs also helped, with natural gas and electricity expenses declining nearly $600,000 year over year.
However, these gains were partly offset by higher repairs and maintenance expenses. The added costs reflected planned work at the Pekin dry mill and ICP, along with continued reliability work at the Carbonic facility to support increased demand for premium CO2 during the seasonally strong summer months.
Even with the higher repairs and maintenance expense, Alto Ingredients’ Western facilities remained profitable on a gross-profit basis in the second quarter. The results indicate that stronger crush economics and lower utility costs were sufficient to absorb the added maintenance burden during the period, although the higher spending still acted as a partial offset to the broader improvement in gross profit.
What Do the Latest Metrics Say About Alto Ingredients?
Alto Ingredients, which competes with Green Plains Inc. (GPRE - Free Report) and Aemetis, Inc. (AMTX - Free Report) , has seen its shares fall 16.3% in the past month, underperforming the industry’s 5.6% growth. Shares of Aemetis have risen 22.4%, while Green Plains has declined 11.9% during the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, Alto Ingredients’ forward price-to-sales ratio of 0.32 is lower than the industry’s average of 3.36. The company is also trading at a discount to Green Plains (with a forward price-to-sales ratio of 0.54) and Aemetis (0.40).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Alto Ingredients’ 2026 and 2027 earnings per share has declined 27.8% and 66.3% to 39 cents and 28 cents, respectively, in the past 30 days.
Alto Ingredients currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.