Ingredion faces margin pressure as Argo plant issues add $40 million in costs

Ingredion Inc. (INGR) reported first-quarter operational setbacks and margin pressure, with management citing production problems at its Argo facility that drove $40 million in unexpected costs and disrupted supply in its U.S./Canada Food and Industrial Ingredients segment. CEO Jim Zallie called the quarter “weaker than anticipated,” pointing to additional issues at Argo, ongoing softness in Latin American demand and unfavorable currency movements. The Texture and Healthful Solutions segment posted volume growth, but it was not enough to offset the broader pressure. Investors are watching the pace of Argo’s recovery, the company’s ability to sustain pricing actions against cost inflation, and demand trends in Latin America as Ingredion proceeds with plant optimizations and closures. Ingredion shares recently traded at $106.20, little changed from $106.88 before the earnings update.