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Agriculture Stocks Earnings on Aug 3: CF, AGU, SMG, ANDE

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We are well passed the midpoint of the second-quarter earnings season, with 317 companies on the S&P 500 index having already reported their quarterly numbers. The results so far have painted a modest growth picture when compared with the last two quarters.

Per the latest Earnings Preview report, considering the actual results from the S&P 500 members that reported till last Friday, total Q2 earnings are expected to skid 3.4% year over year on 0.4% lower revenues with the Energy sector being a major drag. This, if it eventually happens, will mark the fifth straight quarter of earnings decline for the benchmark index.

In this write-up, we put the spotlight on a few agriculture companies that are schedule to report their quarterly results on Aug 3.

The agriculture market is not out of the woods and there is a continuous negative sentiment among investors keen on this space. While prices of major crops (such as corn and soybeans) have recovered lately, they remain at their multi-year lows.

The prevailing softness in agricultural commodity pricing is a concern for fertilizer and agricultural chemicals companies as it is hindering fertilizer use by farmers given the adverse effect of lower crop pricing on growers’ income. Lower farm income has a negative influence on growers’ nutrient purchasing decisions.

Moreover, the crop protection market remains under pressure, in part, due to a slowdown in Brazil. Agricultural market conditions remain weak in Brazil impacted by cautious buying by farmers and the uncertain political and economic situation in that country. A challenging currency environment coupled with economic weakness has also slowed down demand for nutrients across certain emerging markets.

Fertilizer makers also remain exposed to a difficult pricing environment for the nutrients they sale. Global capacity expansion continues to exert pressure on fertilizer prices. Margins of these companies remain thwarted by a weak nutrient pricing environment.

Let’s see what’s in store for these four agriculture companies that are set to report their quarterly numbers on Aug 3.

CF Industries Holdings, Inc. (CF - Free Report) will report second-quarter results after the bell. The company has an Earnings ESP of -5.88% and a Zacks Rank #5 (Strong Sell), making it difficult to predict an earnings beat. CF Industries missed the Zacks Consensus Estimate in three of the trailing four quarters with an average negative surprise of 16.06%.

CF Industries continues to see pricing pressure in its nitrogen business. Nitrogen prices remain under pressure due to elevated supply. (Read more: Is CF Industries Set to Disappoint in Q2 Earnings? )

CF INDUS HLDGS Price and EPS Surprise

CF INDUS HLDGS Price and EPS Surprise | CF INDUS HLDGS Quote

Agrium Inc. will report second-quarter results after the close. It has an Earnings ESP of -2.47% as the Most Accurate estimate stands at $3.95 while the Zacks Consensus Estimate is pegged at $4.05. The stock carries a favorable Zacks Rank #3 (Hold), but its negative ESP makes surprise prediction difficult. Agrium beat the Zacks Consensus Estimate in three of the trailing four quarters with an average positive surprise of 39.42%.

AGRIUM INC Price and EPS Surprise

AGRIUM INC Price and EPS Surprise | AGRIUM INC Quote

The Scotts Miracle-Gro Company (SMG - Free Report) will report fiscal third-quarter results before the bell. It has an Earnings ESP of +1.92% as the Most Accurate estimate stands at $2.12 while the Zacks Consensus Estimate is pegged at $2.08. The company carries a Zacks Rank #4 (Sell), which we caution against ahead of the earnings release. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 13.07%.

SCOTTS MIRCL-GR Price and EPS Surprise

SCOTTS MIRCL-GR Price and EPS Surprise | SCOTTS MIRCL-GR Quote

The Andersons, Inc. (ANDE - Free Report) will report second-quarter results after the close. It has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 68 cents. The company carries a Zacks Rank #3, but its 0.00% ESP makes surprise prediction difficult. The company missed the Zacks Consensus Estimate in three of the trailing four quarters, with an average negative surprise of 393.22%.

ANDERSONS INC Price and EPS Surprise

ANDERSONS INC Price and EPS Surprise | ANDERSONS INC Quote

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