A month has gone by since the last earnings report for Nutrien (
NTR Quick Quote NTR - Free Report) . Shares have added about 8.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Nutrien due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Nutrien's Earnings and Revenues Lag Estimates in Q2
Nutrien recorded profits of $3,601 million or $6.51 per share in second-quarter 2022, up from a profit of $1,113 million or $1.94 in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $5.85. The bottom line missed the Zacks Consensus Estimate of $5.90. Sales climbed around 49% year over year to $14,506 million in the quarter. The figure, however, missed the Zacks Consensus Estimate of $15,359.8 million. The company benefited from higher selling prices and strong Retail performance in the quarter. Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment rose 25% year over year to $9,422 million in the quarter. Sales of crop nutrients increased in the quarter on higher prices. Sales of crop protection products also increased owing to higher selling prices and increased sales in proprietary products.
Potash division’s sales surged 227% year over year to $2,668 million driven by higher net realized selling prices. Sales volumes in the segment were driven by strong demand in offshore markets. Volumes in North America were impacted by delayed planting and a compressed application window. Selling prices increased on the back of tight supply. Sales in the Nitrogen segment were $1,880 million, up around 91% year over year. The upside can be attributed to higher net realized selling prices, which offset lower volumes. Sales volume fell due to plant outages impacting ammonia and urea production as well as cool and wet spring in North America. The company witnessed higher natural gas costs in the quarter. Sales in the Phosphate segment were $514 million, up 46% year over year on the back of higher net realized selling price. Prices rose in sync with an increase in global benchmark prices. Volumes declined in the quarter, impacted by the cool and wet spring in North America. Financials
At the end of the quarter, Nutrien had cash and cash equivalents of $711 million, down around 60% year over year. Long-term debt was $7,056 million, down roughly 30% year over year.
Cash provided by operating activities was $2,558 million for the reported quarter, up around 30% year over year. The company repurchased around 22 million shares year-to-date as of Aug 2, 2022, for a total of roughly $1.8 billion. Guidance
Nutrien revised its full-year 2022 adjusted EBITDA guidance and full-year adjusted net earnings per share guidance factoring in lower expected Nitrogen earnings due to reduced nitrogen benchmark pricing and higher natural gas costs.
The company now expects adjusted EBITDA of $14-$15.5 billion (down from $14.5-$16.5 billion) for full-year 2022. Adjusted EPS has been forecast in the band of $15.80-$17.80 (down from $16.20-$18.70). Nutrien also sees sustaining capital expenditure of $1.3-$1.4 billion in 2022. The company also now sees potash sales volumes of between 14.3 million and 14.9 million tons in 2022. Nitrogen sales volumes are now projected in the band of 10.6-11 million tons for the year. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.39% due to these changes.
Currently, Nutrien has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nutrien has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutrien is part of the Zacks Fertilizers industry. Over the past month, Mosaic (
MOS Quick Quote MOS - Free Report) , a stock from the same industry, has gained 2.2%. The company reported its results for the quarter ended June 2022 more than a month ago.
Mosaic reported revenues of $5.37 billion in the last reported quarter, representing a year-over-year change of +91.9%. EPS of $3.64 for the same period compares with $1.17 a year ago.
For the current quarter, Mosaic is expected to post earnings of $3.70 per share, indicating a change of +174.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Mosaic. Also, the stock has a VGM Score of A.