CF Industries (CF - Free Report) has resumed production at its Woodward, OK, nitrogen facility. The fertilizer maker shut down operations at the plant in Apr 2014 to address a problem in one of the boilers. The company is in contact with its customers regarding the status of deliveries from the facility.
The Woodward plant, during the outage, completed turnaround maintenance activities that were earlier scheduled to start in Jun 2014. The complex has capacity to produce 480,000 tons of gross ammonia, 820,000 tons of urea ammonium nitrate solution (UAN) and 25,000 tons of urea liquor annually.
CF Industries’ profit (as reported) soared 74% year over year in first-quarter 2014 on a hefty gain from the sale of its phosphate business to Mosaic (MOS - Free Report) . Adjusted earnings beat the Zacks Consensus Estimate while sales miss.
CF Industries, which is one of the leading players in the fertilizer space along with Potash Corp. and Agrium , should gain from low-cost North American natural gas and a healthy start to the domestic planting season.
CF Industries remains on track with its nitrogen capacity expansion projects in Louisiana and Iowa. Both projects are expected to expand the company’s nitrogen production capacity by 25%. CF Industries plans to spend roughly $2 billion on capacity expansion projects this year.
However, CF Industries continues to see lower nitrogen sales. Lower prices for major nitrogen products are hurting sales and margins in this business. Urea prices have been under pressure due to higher supply from Chinese export producers.
Moreover, CF Industries faces intense price competition from both domestic and foreign fertilizer producers. The prices of its products are highly sensitive to demand and supply.
CF Industries is a Zacks Rank #2 (Buy) stock.