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CF (CF) Up 1.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for CF Industries (CF - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CF due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CF Industries' Earnings and Sales Miss Estimates in Q3
CF Industries reported a loss of $185 million or 86 cents per share in the third quarter of 2021 compared with a loss of $28 million or 13 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 96 cents. The bottom line missed the Zacks Consensus Estimate of 97 cents.
Net sales increased 60.8% year over year to $1,362 million in the quarter. However, the figure missed the Zacks Consensus Estimate of $1,426.6 million.
Segment Review
Net sales in the Ammonia segment increased 108.5% year over year to $344 million in the reported quarter. Third-quarter sales volume declined from the prior year’s levels due to lower supply availability stemming from reduced production. Average selling prices in the third quarter increased year over year owing to strong global demand and lower global supply availability.
Sales in the Granular Urea segment increased 55% year over year to $386 million. Average selling prices for urea increased on the back of strong global demand and lower global supply availability. Sales volume declined due to lower supply availability.
Sales in the UAN segment surged 57.3% year over year to $390 million. Sales volume in the third quarter was down compared with prior year’s levels, thanks to lower supply availability from reduced production. Average selling prices increased due to strong global demand and lower global supply availability.
Sales in the AN segment increased 8.3% year over year to $118 million. In the third quarter, sales volume declined year over year due to lower supply availability. Average selling prices increased on strong global demand and reduced global supply availability.
Financials
CF Industries’ cash and cash equivalents increased 36.8% year over year to $757 million at the end of the third quarter. Long-term debt was $3,465 million at the end of the quarter, down 12.5% year over year. The company redeemed $250 million in debt in the third quarter.
Cash flow from operations amounted to $687 million in the reported quarter, up 208.1% year over year.
Outlook
CF Industries expects nitrogen pricing to be positive in 2021 as high global nitrogen demand and lower operating rates in Europe and Asia from high energy prices should sustain a tight global nitrogen supply and demand balance at least into 2023. The company projects around 93 million planted corn acres in the United States in 2022, same as 2021. Moreover, CF Industries projects higher nitrogen demand in North America for industrial uses.
The company expects India to continue to tender for urea into the first quarter next year, due to reduced domestic urea production and lower-than-expected urea volumes secured from tenders earlier in 2021. Lower corn production this year also supported higher corn prices in Brazil and indicates higher planted corn acres in the current and upcoming planting season, the company noted.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 14.8% due to these changes.
VGM Scores
Currently, CF has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CF has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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CF (CF) Up 1.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for CF Industries (CF - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CF due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CF Industries' Earnings and Sales Miss Estimates in Q3
CF Industries reported a loss of $185 million or 86 cents per share in the third quarter of 2021 compared with a loss of $28 million or 13 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were 96 cents. The bottom line missed the Zacks Consensus Estimate of 97 cents.
Net sales increased 60.8% year over year to $1,362 million in the quarter. However, the figure missed the Zacks Consensus Estimate of $1,426.6 million.
Segment Review
Net sales in the Ammonia segment increased 108.5% year over year to $344 million in the reported quarter. Third-quarter sales volume declined from the prior year’s levels due to lower supply availability stemming from reduced production. Average selling prices in the third quarter increased year over year owing to strong global demand and lower global supply availability.
Sales in the Granular Urea segment increased 55% year over year to $386 million. Average selling prices for urea increased on the back of strong global demand and lower global supply availability. Sales volume declined due to lower supply availability.
Sales in the UAN segment surged 57.3% year over year to $390 million. Sales volume in the third quarter was down compared with prior year’s levels, thanks to lower supply availability from reduced production. Average selling prices increased due to strong global demand and lower global supply availability.
Sales in the AN segment increased 8.3% year over year to $118 million. In the third quarter, sales volume declined year over year due to lower supply availability. Average selling prices increased on strong global demand and reduced global supply availability.
Financials
CF Industries’ cash and cash equivalents increased 36.8% year over year to $757 million at the end of the third quarter. Long-term debt was $3,465 million at the end of the quarter, down 12.5% year over year. The company redeemed $250 million in debt in the third quarter.
Cash flow from operations amounted to $687 million in the reported quarter, up 208.1% year over year.
Outlook
CF Industries expects nitrogen pricing to be positive in 2021 as high global nitrogen demand and lower operating rates in Europe and Asia from high energy prices should sustain a tight global nitrogen supply and demand balance at least into 2023. The company projects around 93 million planted corn acres in the United States in 2022, same as 2021. Moreover, CF Industries projects higher nitrogen demand in North America for industrial uses.
The company expects India to continue to tender for urea into the first quarter next year, due to reduced domestic urea production and lower-than-expected urea volumes secured from tenders earlier in 2021. Lower corn production this year also supported higher corn prices in Brazil and indicates higher planted corn acres in the current and upcoming planting season, the company noted.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 14.8% due to these changes.
VGM Scores
Currently, CF has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CF has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.