Nutrien Ltd. (NTR Quick QuoteNTR - Free Report) recorded first-quarter 2023 profits of $576 million or $1.14 per share, down from $1,385 million or $2.49 in the year-ago quarter.

Barring one-time items, adjusted earnings per share (EPS) were $1.11. The bottom line missed the Zacks Consensus Estimate of $1.54.

Sales decreased around 20.2% year over year to $6,107 million in the quarter. The figure missed the Zacks Consensus Estimate of $6,672.9 million.

Nutrien's results were hurt by lower realized selling prices across its segments and reduced sales volumes in Retail, Potash and Phosphate units. These were partly offset by the lower cost of goods sold due to a decline in natural gas costs and higher operating rates at its North American nitrogen plants.

Segment Highlights

Sales in the Nutrien Ag Solutions (Retail) segment declined 11% year over year to $3,422 million in the quarter. Sales of crop nutrients decreased due to lower selling prices.

The Potash division’s sales decreased 46% year over year to $1,002 million due to lower net realized selling prices and sales volumes. Sales volumes in the segment fell in North America due to just-in-time buying.

Sales in the Nitrogen segment were $1,179 million, down around 22% year over year. The downside can be attributed to lower net realized selling prices for all major nitrogen products. Sales volume witnessed a slight increase, benefiting from increased production of Urea in Canadian facilities.

Sales in the Phosphate segment were $446 million, down 21% year over year due to lower production volumes and cautious buying activity.

Financials

At the end of the quarter, Nutrien had cash and cash equivalents of $1,473 million, up around 63% sequentially. Long-term debt was $9,510 million, up roughly 18%.

The company repurchased around 11.8 million shares year to date as of Mar 31, 2023, for a total of roughly $900 million.

Guidance

Nutrien revised its full-year 2023 adjusted EBITDA guidance and full-year adjusted net earnings per share guidance, factoring in lower expected benchmark fertilizer pricing and lower expected natural gas costs in North America.

The company now expects adjusted EBITDA of $6.5-$8 billion for full-year 2023. Adjusted EPS has been forecast in the band of $5.5-$7.5.

The company estimates potash sales volumes of between 13.5 million and 14.3 million tons for 2023. Nitrogen sales volumes are expected to be in the band of 10.8-11.4 million tons for the year.

Price Performance

Nutrien’s shares have plunged 40.9% in the past year compared with 38.4% decline of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

NTR currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD Quick QuoteSTLD - Free Report) , Linde plc (LIN Quick QuoteLIN - Free Report) and PPG Industries, Inc. (PPG Quick QuotePPG - Free Report)

Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 29.4% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 11.9% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 19.7% over the past year.

PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 17.7% for the current year. Shares of PPG have gained 14.6% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.