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CVR Partners (UAN) Q3 Loss Wider than Expected, Sales Lag
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CVR Partners (UAN - Free Report) posted a loss of 12 cents per share in the third quarter of 2016, narrower than a loss of 18 cents reported a year ago. However, the loss was wider than the Zacks Consensus Estimate of a loss of 9 cents.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $17.4 million in the reported quarter, up from $3.8 million in the third quarter of 2015.
The company posted revenues of $78.5 million in the quarter, up around 59.2% year over year. Revenues, however, missed the Zacks Consensus Estimate of $82 million.
CVR Partners’ combined facilities produced 200,800 tons of ammonia in the reported quarter, of which 60,300 net tons were available for sale while the rest was upgraded to other fertilizer products, including 317,200 tons of urea ammonium nitrate (“UAN”).
CVR Partners expanded the ammonia production at the East Dubuque facility. In the second-quarter turnaround of the facility, the company had installed a new ammonia synthesis converter, which has proved a success. The ammonia production levels have averaged over 1,075 tons per day since then, an increase of about 15% from the pre-turnaround production levels.
On-stream factors during the reported quarter were 95.9% for gasification, 94.7% for the ammonia synthesis loop and 94.1% for the UAN conversion facility at the Coffeyville facility. At the East Dubuque facility, on-stream factors during the quarter were 94.4% for the ammonia synthesis loop and 92.9% for the UAN conversion.
Distributions
CVR Partners has decided not to pay any cash distribution for the third quarter of 2016.
Financials
CVR Partners ended the quarter with cash and cash equivalents of $65.3 million, up around 96.7% year over year. Operating cash flow was $18.4 million for the reported quarter, up from $1.1 million in third-quarter 2015. Capital spending for the quarter was $6.4 million.
Outlook
Management is already seeing increasing interest for nitrogen fertilizer, in preparation for the corn planting season. A further surge in demand is expected. However, pricing is likely to continue to be negatively impacted due to additional supply as more production of the fertilizers comes online in the U.S. in the first half of 2017. The company remains focused on operating its facilities at high on-stream rates, effectively managing its logistics as well as controlling costs.
CVR Partners currently has a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space include Koppers Holdings Inc. (KOP - Free Report) , The Chemours Company (CC - Free Report) and LyondellBasell Industries N.V. (LYB - Free Report) .
Koppers Holdings, sporting a Zacks Rank #1 (Strong Buy), has an expected long-term growth of 10%.
LyondellBasell, a Zacks Rank #2 (Buy) stock, has an expected long-term growth of 8.00%.
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CVR Partners (UAN) Q3 Loss Wider than Expected, Sales Lag
CVR Partners (UAN - Free Report) posted a loss of 12 cents per share in the third quarter of 2016, narrower than a loss of 18 cents reported a year ago. However, the loss was wider than the Zacks Consensus Estimate of a loss of 9 cents.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $17.4 million in the reported quarter, up from $3.8 million in the third quarter of 2015.
The company posted revenues of $78.5 million in the quarter, up around 59.2% year over year. Revenues, however, missed the Zacks Consensus Estimate of $82 million.
Operational Statistics
CVR Partners’ combined facilities produced 200,800 tons of ammonia in the reported quarter, of which 60,300 net tons were available for sale while the rest was upgraded to other fertilizer products, including 317,200 tons of urea ammonium nitrate (“UAN”).
CVR Partners expanded the ammonia production at the East Dubuque facility. In the second-quarter turnaround of the facility, the company had installed a new ammonia synthesis converter, which has proved a success. The ammonia production levels have averaged over 1,075 tons per day since then, an increase of about 15% from the pre-turnaround production levels.
On-stream factors during the reported quarter were 95.9% for gasification, 94.7% for the ammonia synthesis loop and 94.1% for the UAN conversion facility at the Coffeyville facility. At the East Dubuque facility, on-stream factors during the quarter were 94.4% for the ammonia synthesis loop and 92.9% for the UAN conversion.
Distributions
CVR Partners has decided not to pay any cash distribution for the third quarter of 2016.
Financials
CVR Partners ended the quarter with cash and cash equivalents of $65.3 million, up around 96.7% year over year. Operating cash flow was $18.4 million for the reported quarter, up from $1.1 million in third-quarter 2015. Capital spending for the quarter was $6.4 million.
Outlook
Management is already seeing increasing interest for nitrogen fertilizer, in preparation for the corn planting season. A further surge in demand is expected. However, pricing is likely to continue to be negatively impacted due to additional supply as more production of the fertilizers comes online in the U.S. in the first half of 2017. The company remains focused on operating its facilities at high on-stream rates, effectively managing its logistics as well as controlling costs.
CVR PARTNERS LP Price, Consensus and EPS Surprise
CVR PARTNERS LP Price, Consensus and EPS Surprise | CVR PARTNERS LP Quote
Zacks Rank
CVR Partners currently has a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space include Koppers Holdings Inc. (KOP - Free Report) , The Chemours Company (CC - Free Report) and LyondellBasell Industries N.V. (LYB - Free Report) .
Koppers Holdings, sporting a Zacks Rank #1 (Strong Buy), has an expected long-term growth of 10%.
Chemours, with an expected long-term growth of 15.50%, sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell, a Zacks Rank #2 (Buy) stock, has an expected long-term growth of 8.00%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>