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CF Industries' (CF) Q1 Earnings Beat Estimates, Sales Lag

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CF Industries Holdings, Inc. (CF - Free Report) reported a profit of $151 million or 70 cents per share in the first quarter of 2021 compared with profits of $68 million or 31 cents in the year-ago quarter. Also, earnings per share surpassed the Zacks Consensus Estimate of 57 cents.

Net sales increased 8% year over year to $1,048 million in the quarter. However, the figure missed the Zacks Consensus Estimate of $1,095.3 million.

Per the company, average selling prices in the reported quarter were higher on a year-over-year basis across most segments due to lower global supply availability. But, sales volume in the first quarter was lower than the prior-year quarter’s levels due to lower supply availability.

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

 

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

CF Industries Holdings, Inc. price-consensus-eps-surprise-chart | CF Industries Holdings, Inc. Quote

 

Segment Review

Net sales in the Ammonia segment increased 6.7% year over year to $206 million in the reported quarter. In the first quarter, sales volume declined from the prior-year quarter’s levels owing to lower supply availability stemming from reduced production. Average selling prices in the first quarter increased year over year due to lower global supply availability.

Sales in the Granular Urea segment increased 18.4% year over year to $399 million. Average selling prices for urea increased in the first quarter due to lower global supply availability, while sales volume fell due to lower supply availability.

Sales in the UAN segment inched down 1% year over year to $232 million. Sales volume in the first quarter increased from the prior-year quarter’s levels owing to higher supply availability from increased production. Average selling prices declined due to higher global supply availability.

Sales in the AN segment declined 9.5% year over year to $105 million. In the first quarter, sales volumes fell year over year due to lower supply availability. Average selling prices increased due to lower global supply availability.

Financials

CF Industries’ cash and cash equivalents increased 6.7% year over year to $804 million at the end of first quarter. Long-term debt was $3,713 million at the end of the quarter, down 6.2% year over year.

Cash flow from operations amounted to $578 million in the reported quarter, up 98% year over year. 

Outlook

CF Industries expects nitrogen pricing to be positive in 2021 as global nitrogen supply and demand balance has been significantly tightened by low global coarse grains stocks-to-use ratios as well as higher energy prices in Asia and Europe. The company projects around 90-92 million planted corn acres in the United States in 2021. It also expects higher canola plantings in Canada to support nitrogen demand. Moreover, CF Industries projects higher nitrogen demand in North America for industrial uses. The company anticipates nitrogen requirements in other regions to remain strong this year, which is likely to be driven by strong demand for urea imports from India and Brazil.

Price Performance

Shares of CF Industries have surged 81.9% in the past year compared with 99% rise of the industry.

Zacks Rank & Key Picks

CF Industries currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 107.2% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 228.4% for the current year. The company’s shares have gained 127% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have skyrocketed 223.3% in the past year. It currently flaunts a Zacks Rank #1.

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