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CF Industries (CF) to Report Q3 Earnings: What's in Store?
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CF Industries Holdings, Inc. (CF - Free Report) is set to release third-quarter 2023 results on Nov 1, after the closing bell.
CF Industries beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missing it once. The company delivered a trailing four-quarter earnings surprise of 4.8%, on average. CF’s third-quarter results are likely to reflect the impacts of softer nitrogen prices.
Shares of CF Industries have lost 24.6% in the past year compared with a 38% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Indicate?
The Zacks Consensus Estimate for CF Industries' third-quarter total sales is currently pegged at $1,289.8 million, which indicates a 44.4% decline year over year.
Our estimate for total sales in the Ammonia segment is currently pegged at $324 million, indicating a 39% decline on a year-over-year basis. The same for the Granular Urea segment is $255.9 million, which suggests a decrease of 62.9%.
Our estimate for sales of the Urea Ammonium Nitrate Solution segment currently stands at $469 million, which suggests a decline of 36.3% year over year.
Our estimate for total sales of the Ammonium Nitrate segment is $116.7 million, which indicates a decline of 35.2% year over year.
Factors at Play in Q3
CF Industries is expected to have benefited from expanding global demand for nitrogen fertilizers, being driven by strong agricultural demand. Demand for nitrogen is likely to have remained healthy in the third quarter on the back of higher crop commodity prices, high levels of corn planted acres and favorable farm economics. Additionally, lower natural gas prices are expected to have led to a decline in the company's cost of sales.
Lower nitrogen prices are likely to have been a challenge for CF Industries. Since the beginning of 2023, global nitrogen prices have been falling. Prices have declined owing to a rise in worldwide supply availability due to higher global operating rates caused by reduced global energy costs. In the second quarter, lower average selling prices dragged on CF's bottom line. The unfavorable pricing environment is likely to have persisted in the third quarter as well. Lower pricing is expected to have hurt CF’s sales and profitability.
Zacks Model
Our proven model predicts an earnings beat for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Earnings ESP for CF Industries is +4.79%. This is because the Most Accurate Estimate is currently pegged at 99 cents while the Zacks Consensus Estimate stands at 94 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries currently carries a Zacks Rank #2.
CF Industries Holdings, Inc. Price and EPS Surprise
Here are some other companies in the basic materials space you may want to consider, as our model shows these, too, have the right combination of elements to post an earnings beat this quarter:
Image: Bigstock
CF Industries (CF) to Report Q3 Earnings: What's in Store?
CF Industries Holdings, Inc. (CF - Free Report) is set to release third-quarter 2023 results on Nov 1, after the closing bell.
CF Industries beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missing it once. The company delivered a trailing four-quarter earnings surprise of 4.8%, on average. CF’s third-quarter results are likely to reflect the impacts of softer nitrogen prices.
Shares of CF Industries have lost 24.6% in the past year compared with a 38% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What Do the Estimates Indicate?
The Zacks Consensus Estimate for CF Industries' third-quarter total sales is currently pegged at $1,289.8 million, which indicates a 44.4% decline year over year.
Our estimate for total sales in the Ammonia segment is currently pegged at $324 million, indicating a 39% decline on a year-over-year basis. The same for the Granular Urea segment is $255.9 million, which suggests a decrease of 62.9%.
Our estimate for sales of the Urea Ammonium Nitrate Solution segment currently stands at $469 million, which suggests a decline of 36.3% year over year.
Our estimate for total sales of the Ammonium Nitrate segment is $116.7 million, which indicates a decline of 35.2% year over year.
Factors at Play in Q3
CF Industries is expected to have benefited from expanding global demand for nitrogen fertilizers, being driven by strong agricultural demand. Demand for nitrogen is likely to have remained healthy in the third quarter on the back of higher crop commodity prices, high levels of corn planted acres and favorable farm economics. Additionally, lower natural gas prices are expected to have led to a decline in the company's cost of sales.
Lower nitrogen prices are likely to have been a challenge for CF Industries. Since the beginning of 2023, global nitrogen prices have been falling. Prices have declined owing to a rise in worldwide supply availability due to higher global operating rates caused by reduced global energy costs. In the second quarter, lower average selling prices dragged on CF's bottom line. The unfavorable pricing environment is likely to have persisted in the third quarter as well. Lower pricing is expected to have hurt CF’s sales and profitability.
Zacks Model
Our proven model predicts an earnings beat for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Earnings ESP for CF Industries is +4.79%. This is because the Most Accurate Estimate is currently pegged at 99 cents while the Zacks Consensus Estimate stands at 94 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries currently carries a Zacks Rank #2.
CF Industries Holdings, Inc. Price and EPS Surprise
CF Industries Holdings, Inc. price-eps-surprise | CF Industries Holdings, Inc. Quote
Other Stocks That Warrant a Look
Here are some other companies in the basic materials space you may want to consider, as our model shows these, too, have the right combination of elements to post an earnings beat this quarter:
Kinross Gold Corporation (KGC - Free Report) , slated to release earnings on Nov 8, has an Earnings ESP of +8.70% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for earnings for KGC for the third quarter is pegged at 9 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , scheduled to release earnings on Nov 1, has an Earnings ESP of +5.39% and carries a Zacks Rank #3.
The consensus estimate for AXTA’s earnings for the third quarter is currently pegged at 38 cents.
IAMGOLD Corporation (IAG - Free Report) , which is scheduled to release earnings on Nov 9, has an Earnings ESP of +10.71% and carries a Zacks Rank #2.
The consensus estimate for IAG for the third quarter is currently pegged at a loss of 3 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.