We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CF Industries (CF) Q3 Earnings Preview: What's in the Cards?
Read MoreHide Full Article
CF Industries Holdings, Inc. (CF - Free Report) is set to release third-quarter 2017 results after the closing bell on Nov 1.
The fertilizer maker delivered a positive earnings surprise of 255% in second-quarter 2017. Its adjusted earnings came in at 10 cents per share for the quarter, compared with earnings of 33 cents a year ago. Analysts polled by Zacks were expecting loss of 8 cents on average for the second quarter.
Sales dipped roughly 0.9% year over year to $1,124 million in the quarter as higher volumes in most segments were offset by lower average selling prices. Revenues, however, beat the Zacks Consensus Estimate of $1,031 million.
CF Industries beat the Zacks Consensus Estimate in two of the trailing four quarters, while missing in the other two with an average negative surprise of 52.4%.
CF Industries has outperformed the industry it belongs to over a year. The company’s shares have gained around 54.5% over this period, compared with roughly 23.6% gain recorded by the industry.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that CF Industries is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:
Zacks ESP: The Earnings ESP for CF Industries is +1.83% as the Most Accurate estimate stands at a loss of 54 cents while the Zacks Consensus Estimate is pegged at a loss of 55 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries carries a Zacks Rank #2 which when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
CF Industries continues to bear the brunt of pricing pressure. The company, in its second-quarter call, said that it anticipates nitrogen pricing environment to be challenging through the balance of 2017 and also in 2018, as the global markets continue to adapt to considerable capacity increase in the recent years. The company also noted that North America is entering into a period of seasonally lowest demand and prices, and substantial imports could pressure selling prices in the third quarter.
Urea prices have been under pressure due to higher nitrogen supply. High supply levels in the global nitrogen market due to capacity additions pressured pricing in the second quarter and remain a headwind in the September quarter.
The Zacks Consensus Estimate for average selling prices for the company’s ammonia unit for the third quarter stands at $243 per ton, reflecting an expected decrease of 15.3% from the year-ago quarter. The Zacks Consensus Estimate for the granular urea segment stands at $193 per ton, representing an expected 4.9% year over year decline.
Average selling price for the urea ammonium nitrate (UAN) unit is expected to decline 12.7% year over year as the Zacks Consensus Estimate stands at $137 per ton.
Nevertheless, CF Industries should benefit from cost efficiencies in the to-be-reported quarter. The company also gained from strong sales volume in the second quarter which is expected to continue to support its results in the third quarter.
Ammonia sales volumes are projected to witness a 19.6% year-over-year rise in the third quarter as the Zacks Consensus Estimate is pegged at roughly 0.6 million tons. The Zacks Consensus Estimate for granular urea sales volume is pegged at 1.1 million tons, reflecting a 33.2% year over year rise. Moreover, UAN sales volumes are expected to increase 15.6% year over year as the Zacks Consensus Estimate stands at around 1.6 million tons.
Moreover, the Zacks Consensus Estimate for revenues for CF Industries for the to-be-reported quarter stands at $723 million, reflecting an increase of 6.3% from the year-ago quarter.
CF Industries Holdings, Inc. Price and EPS Surprise
Here are some other companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +2.94% and sports a Zacks Rank #2.
United States Steel Corporation (X - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Image: Bigstock
CF Industries (CF) Q3 Earnings Preview: What's in the Cards?
CF Industries Holdings, Inc. (CF - Free Report) is set to release third-quarter 2017 results after the closing bell on Nov 1.
The fertilizer maker delivered a positive earnings surprise of 255% in second-quarter 2017. Its adjusted earnings came in at 10 cents per share for the quarter, compared with earnings of 33 cents a year ago. Analysts polled by Zacks were expecting loss of 8 cents on average for the second quarter.
Sales dipped roughly 0.9% year over year to $1,124 million in the quarter as higher volumes in most segments were offset by lower average selling prices. Revenues, however, beat the Zacks Consensus Estimate of $1,031 million.
CF Industries beat the Zacks Consensus Estimate in two of the trailing four quarters, while missing in the other two with an average negative surprise of 52.4%.
CF Industries has outperformed the industry it belongs to over a year. The company’s shares have gained around 54.5% over this period, compared with roughly 23.6% gain recorded by the industry.
Let’s see how things are shaping up for this announcement.
Earnings Whispers
Our proven model shows that CF Industries is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:
Zacks ESP: The Earnings ESP for CF Industries is +1.83% as the Most Accurate estimate stands at a loss of 54 cents while the Zacks Consensus Estimate is pegged at a loss of 55 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries carries a Zacks Rank #2 which when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
CF Industries continues to bear the brunt of pricing pressure. The company, in its second-quarter call, said that it anticipates nitrogen pricing environment to be challenging through the balance of 2017 and also in 2018, as the global markets continue to adapt to considerable capacity increase in the recent years. The company also noted that North America is entering into a period of seasonally lowest demand and prices, and substantial imports could pressure selling prices in the third quarter.
Urea prices have been under pressure due to higher nitrogen supply. High supply levels in the global nitrogen market due to capacity additions pressured pricing in the second quarter and remain a headwind in the September quarter.
The Zacks Consensus Estimate for average selling prices for the company’s ammonia unit for the third quarter stands at $243 per ton, reflecting an expected decrease of 15.3% from the year-ago quarter. The Zacks Consensus Estimate for the granular urea segment stands at $193 per ton, representing an expected 4.9% year over year decline.
Average selling price for the urea ammonium nitrate (UAN) unit is expected to decline 12.7% year over year as the Zacks Consensus Estimate stands at $137 per ton.
Nevertheless, CF Industries should benefit from cost efficiencies in the to-be-reported quarter. The company also gained from strong sales volume in the second quarter which is expected to continue to support its results in the third quarter.
Ammonia sales volumes are projected to witness a 19.6% year-over-year rise in the third quarter as the Zacks Consensus Estimate is pegged at roughly 0.6 million tons. The Zacks Consensus Estimate for granular urea sales volume is pegged at 1.1 million tons, reflecting a 33.2% year over year rise. Moreover, UAN sales volumes are expected to increase 15.6% year over year as the Zacks Consensus Estimate stands at around 1.6 million tons.
Moreover, the Zacks Consensus Estimate for revenues for CF Industries for the to-be-reported quarter stands at $723 million, reflecting an increase of 6.3% from the year-ago quarter.
CF Industries Holdings, Inc. Price and EPS Surprise
CF Industries Holdings, Inc. price-eps-surprise | CF Industries Holdings, Inc. Quote
Stocks to Consider
Here are some other companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +2.94% and sports a Zacks Rank #2.
United States Steel Corporation (X - Free Report) has an Earnings ESP of +5.97% and a Zacks Rank #3.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>