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What's in the Cards for CVR Partners (UAN) in Q2 Earnings?
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CVR Partners, LP (UAN - Free Report) is set to release second-quarter 2018 results, after the bell on Jul 25.
CVR Partners logged a loss of $19 million or 17 cents per share in the first quarter, wider than a loss of $10 million or 9 cents it posted a year ago. The loss per share was also wider than the Zacks Consensus Estimate of a loss of 13 cents, translating into a negative surprise of 30.8%. The results were affected by downtime at the company’s East Dubuque plant.
CVR Partners raked in net sales of $80 million, down around 6% year over year, mainly impacted by lower ammonia volumes. Ammonia sales volumes fell around 9% year over year in the quarter, partly due to unplanned downtime at East Dubuque.
CVR Partners missed earnings estimates in three of the trailing four quarters with an average negative surprise of 64.3%.
The company’s shares have declined around 2.9% over a year, underperforming the industry’s 25% rise.
Let’s take a look at how things are shaping up for this announcement.
Factors to Consider
CVR Partners, during its first-quarter call, noted that longer-than-usual winter weather conditions and late snowfall delayed the start of the spring planting season. However, the company is expected to benefit from healthy nitrogen fertilizer demand this year. CVR Partners continues to expect a strong application period with robust demand on the back of below normal level of customer inventory and a projected 88 million planted corn acres.
Meanwhile, the company remains committed to ramp up its urea ammonium nitrate (“UAN”) production capacity. It should also benefit from the Rentech acquisition.
With the buyout of Rentech Nitrogen Partners, the company has been able to create an entity with larger scale, enhance production capacity and increase operating reach. The combined company is now the second-biggest producer of UAN in North America.
CVR Partners faced pricing pressure in the last reported quarter due to the challenging nitrogen fertilizer pricing environment. UAN prices fell roughly 4% in the first quarter, affecting its sales. However, urea prices have been on an upswing of late. The company is likely to benefit from an improved nitrogen pricing environment in the to-be-reported quarter.
However, the company’s Coffeyville plant started a full-facility turnaround in the second quarter. Lost production during the downtime may impact its volumes in the June quarter.
Our proven model does not show that CVR Partners is likely to beat the Zacks Consensus Estimate this quarter. This 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 not the case here as you will see below:
Earnings ESP: CVR Partners has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CVR Partners carries a Zacks Rank #3, which when coupled with a 0.00% ESP, makes surprise prediction difficult. Note that stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
TimkenSteel Corporation has an Earnings ESP of +4.21% and carries a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
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Image: Bigstock
What's in the Cards for CVR Partners (UAN) in Q2 Earnings?
CVR Partners, LP (UAN - Free Report) is set to release second-quarter 2018 results, after the bell on Jul 25.
CVR Partners logged a loss of $19 million or 17 cents per share in the first quarter, wider than a loss of $10 million or 9 cents it posted a year ago. The loss per share was also wider than the Zacks Consensus Estimate of a loss of 13 cents, translating into a negative surprise of 30.8%. The results were affected by downtime at the company’s East Dubuque plant.
CVR Partners raked in net sales of $80 million, down around 6% year over year, mainly impacted by lower ammonia volumes. Ammonia sales volumes fell around 9% year over year in the quarter, partly due to unplanned downtime at East Dubuque.
CVR Partners missed earnings estimates in three of the trailing four quarters with an average negative surprise of 64.3%.
The company’s shares have declined around 2.9% over a year, underperforming the industry’s 25% rise.
Let’s take a look at how things are shaping up for this announcement.
Factors to Consider
CVR Partners, during its first-quarter call, noted that longer-than-usual winter weather conditions and late snowfall delayed the start of the spring planting season. However, the company is expected to benefit from healthy nitrogen fertilizer demand this year. CVR Partners continues to expect a strong application period with robust demand on the back of below normal level of customer inventory and a projected 88 million planted corn acres.
Meanwhile, the company remains committed to ramp up its urea ammonium nitrate (“UAN”) production capacity. It should also benefit from the Rentech acquisition.
With the buyout of Rentech Nitrogen Partners, the company has been able to create an entity with larger scale, enhance production capacity and increase operating reach. The combined company is now the second-biggest producer of UAN in North America.
CVR Partners faced pricing pressure in the last reported quarter due to the challenging nitrogen fertilizer pricing environment. UAN prices fell roughly 4% in the first quarter, affecting its sales. However, urea prices have been on an upswing of late. The company is likely to benefit from an improved nitrogen pricing environment in the to-be-reported quarter.
However, the company’s Coffeyville plant started a full-facility turnaround in the second quarter. Lost production during the downtime may impact its volumes in the June quarter.
CVR Partners, LP Price and EPS Surprise
CVR Partners, LP price-eps-surprise | CVR Partners, LP Quote
Earnings Whispers
Our proven model does not show that CVR Partners is likely to beat the Zacks Consensus Estimate this quarter. This 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 not the case here as you will see below:
Earnings ESP: CVR Partners has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CVR Partners carries a Zacks Rank #3, which when coupled with a 0.00% ESP, makes surprise prediction difficult. Note that stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:
Orion Engineered Carbons, S.A. (OEC - Free Report) has an Earnings ESP of +3.85% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
TimkenSteel Corporation has an Earnings ESP of +4.21% and carries a Zacks Rank #2.
Ingevity Corporation (NGVT - Free Report) has an Earnings ESP of +1.52% and carries a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>