Back to top

Image: Bigstock

CF Industries' (CF) Earnings, Revenues Top Estimates in Q2

Read MoreHide Full Article

CF Industries Holdings, Inc. (CF - Free Report) reported profit of $148 million or 63 cents per share in the second quarter of 2018 compared with profit of $3 million or a penny per share a year ago. Earnings in the reported quarter beat the Zacks Consensus Estimate of 42 cents.
 
Net sales increased around 15.6% year over year to $1,300 million in the quarter on higher sales volumes across most segments and increased average selling prices across all segments. Sales in the quarter surpassed the Zacks Consensus Estimate of $1,199 million.

CF Industries Holdings, Inc. Price, Consensus and EPS Surprise

Segment Review

Net sales at the Ammonia segment declined 3.8% year over year to $374 million in the reported quarter. Ammonia sales volumes fell 5% year over year to 1,094,000 tons. Average selling prices rose a modest 1.1% year over year to $342 per ton.

Sales at the Granular Urea segment rose roughly 38.9% year over year to $360 million. Sales volumes increased around 17.4% year over year to 1,434,000 tons on carry-over demand from the first quarter on account of unfavorable weather conditions during early 2018. Average selling prices for granular urea rose 18.3% year over year to $251 per ton.

Sales at the urea ammonium nitrate solution (UAN) segment increased 18.5% year over year to $339 million. UAN sales volume rose roughly 11.5% year over year to 1,820,000 tons in the quarter due to carry-over demand. Average selling prices rose 6.2% year over year to $186 per ton.

Sales at the ammonium nitrate segment increased 10.7% year over year to $124 million. Sales volumes rose around 5.3% to 568,000 tons. Average selling prices increased 4.8% year over year to $218 per ton.

Financials
 
CF Industries’ cash and cash equivalents were $728 million at the end of second-quarter 2018, down roughly 63.6% year over year.

Long-term debt was $4,695 million, down around 5.8% year over year.    

Outlook
 
CF Industries anticipates net global urea supply growth to be lower than the historical nitrogen demand growth of around 2%, over the long run. The company sees 4.3 million metric tons for nameplate urea capacity start up for 2018. It also expects a year-over-year increase in urea imports to Brazil during the second half partly owing to the expected lost production from the scheduled closure of two Petrobras urea plants in August. Further, the company also anticipates global supply of nitrogen to be constrained over the next few years.
 
The company expects capital expenditures for new activities in the range of $400-$450 million in 2018, factoring in higher number of plant turnarounds in the second half compared with 2017.

Price Performance
 
Shares of CF Industries have moved up 43.7% over a year, outperforming the 26.6% gain recorded by its industry.



 

Zacks Rank & Stocks to Consider
 
CF Industries currently has a Zacks Rank #3 (Hold).
 
A few better-ranked stocks in the basic materials space are Celanese Corp. (CE - Free Report) , BHP Billiton Ltd. (BHP - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
 
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 21.1% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
BHP Billiton has an expected long-term earnings growth rate of 5.3%, carrying a Zacks Rank #1. Its shares have rallied roughly 26% in a year’s time.
 
Steel Dynamics has an expected long-term earnings growth rate of 12% and a Zacks Rank #2 (Buy). The stock has gained 31.2% in the past year.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>