It has been about a month since the last earnings report for Nutrien (
NTR Quick Quote NTR - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutrien due for a breakout? 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 catalysts.
Nutrien's Q2 Earnings Lag Estimates, Revenues Beat
Nutrien recorded second-quarter 2023 profits of $448 million or 89 cents per share, down from $3,601 million or $6.51 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $2.53. The bottom line missed the Zacks Consensus Estimate of $2.83.
Sales plunged around 19.7% year over year to $11,654 million in the quarter. The figure, however, surpassed the Zacks Consensus Estimate of $11,179.7 million.
The results were adversely impacted by the unprecedented volatility in global crop input markets over the past 18 months. It, however, saw strong demand in its major markets, particularly North America.
Sales in the Nutrien Ag Solutions (Retail) segment declined 3% year over year to $9,128 million in the quarter. The decline in the second quarter was primarily due to a 12% fall in crop nutrients sales on lower selling prices across all regions compared to the strong periods in 2022. The figure was higher than our estimate of $6,500.8 million.
Potash division’s sales declined 59% year over year to $1,116 million, lower than our estimate of $2,488.8 million. Sales volumes declined in the second quarter. Offshore sales volumes decreased in the quarter due to reduced shipments to customers in Asia, partly offset by record first-half Canpotex sales volumes to Brazil.
Sales in the Nitrogen segment were $1,371 million, down around 42% year over year. The decline was due to lower net realized selling price in the second quarter for all major nitrogen products, mainly due to weaker benchmark prices resulting from lower energy prices in key nitrogen-producing regions. The reported figure was lower than our estimate of $1,901.3 million.
Sales in the Phosphate segment were $560 million, down around 13% year over year, affected by the decrease in net realized selling price in the second quarter. The figure was lower than our estimate of $846.7 million.
At the end of the quarter, Nutrien had cash and cash equivalents of $737 million, up around 3.7% year over year. Long-term debt was $9,498 million, up roughly 35% year over year.
Cash provided by operating activities was $2,243 million in the reported quarter, down around 12% year over year.
The company now expects adjusted EBITDA of $5.5-$6.7 billion for full-year 2023. Adjusted EPS has been forecast in the band of $3.85-$5.60 per share. Nutrien expects cash provided by operations of $4.4-$4.9 billion, suggesting lower earnings expectations.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -23.77% due to these changes.
Currently, Nutrien has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile 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. It's no surprise Nutrien has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.