Darling’s Profit Jumps to $267 Million as Renewable Fuel Swings Back
Darling Ingredients reported a dramatic third-quarter earnings reversal on October 28, but the headline increase was not produced evenly across its business. The largest change came from renewable diesel, while the feed operation also delivered a substantial underlying improvement and the human-food ingredients division grew much more modestly.
Net income attributable to Darling reached $267.0 million in the quarter ended October 3, up from $19.4 million a year earlier. That is a $247.6 million increase and nearly 13.8 times the prior-year result. Sales rose 14.5% to $1.79 billion, while combined adjusted EBITDA more than doubled to $514.3 million.
Renewable fuel produced most of the operating swing
Darling owns half of Diamond Green Diesel, the renewable-fuels venture it operates with Valero. Darling's share of the venture's adjusted EBITDA was $204.2 million in the quarter, compared with a $2.9 million loss a year earlier. The venture therefore supplied almost 40% of Darling's combined adjusted EBITDA in the latest period.
The accounting effect was similarly large. Equity income from Diamond Green Diesel was $165.6 million, reversing a $45.8 million loss. That $211.5 million swing represented about 81% of the $261.5 million year-over-year increase in Darling's consolidated operating income. It explains why the profit increase was far larger than the 14.5% sales growth.
Diamond Green Diesel shipped 314.9 million gallons during the quarter and generated adjusted EBITDA of $1.30 per gallon on the basis calculated by Darling. Operating revenue at the venture nearly doubled to $2.39 billion. The joint venture also provided Darling with $171.0 million in cash: $33.4 million in dividends and $137.6 million from production-tax-credit sales.
Feed improved faster than food ingredients
The feed segment's adjusted EBITDA rose 42.4% to $247.7 million from $174.0 million. Its gross margin increased by $84.1 million to $333.9 million as sales rose 17.3%. This is the clearest evidence that the quarter was not solely a renewable-fuel story.
Food Ingredients, which includes collagen and gelatin products, was steadier. Sales increased 9.3% to $415.8 million, but adjusted EBITDA rose only 3.0% to $73.8 million. Its gross margin expanded by about $5.4 million. The contrast suggests that stronger sales did not translate into the same degree of earnings leverage as in feed.
Corporate adjusted costs also widened to $35.2 million from $22.3 million. In addition, the reported net-income increase included a $63.5 million gain on business sales. Readers should therefore distinguish the broad operating improvement from the unusually strong contribution of renewable-fuel economics and a one-time disposal gain.
Cash moved toward debt, investment and buybacks
Darling said net debt fell by approximately $420 million during the quarter. At October 3, net debt stood at $3.37 billion and the preliminary bank-covenant leverage ratio was 1.7 times. Long-term debt, excluding the current portion, was $3.41 billion, down from $3.86 billion at the start of the year.
The company was simultaneously spending and returning cash. Capital expenditure reached $343.5 million in the first nine months, against a full-year estimate of about $450 million. Darling repurchased $75.9 million of shares during the quarter and $149.4 million through the first nine months.
The fourth quarter still has work to do
Management maintained full-year combined adjusted EBITDA guidance of $2.2 billion to $2.3 billion. With $1.663 billion recorded through nine months, that range implies $537 million to $637 million in the fourth quarter. The midpoint, $587 million, would be about 14% above the third-quarter result.
The main indicators to watch are Diamond Green Diesel's per-gallon earnings, the timing and cash value of production tax credits, feed-segment margins and further debt reduction. The quarter shows how quickly the economics of converting food and agricultural by-products can improve when renewable-fuel margins recover, but it also shows how concentrated the incremental profit was.
Primary source: Darling Ingredients third-quarter 2026 results and financial tables, published October 28, 2026.
Methodology: Agrilinkage calculated year-over-year changes, segment shares and the implied fourth-quarter guidance requirement from the figures in Darling's release. Adjusted EBITDA is a company-defined non-GAAP measure and should be read with the reconciliations in the source.
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