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Nutrien's (NTR) Q1 Earnings and Revenues Surpass Estimates
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Nutrien Ltd. (NTR - Free Report) recorded profits of $165 million or 32 cents per share in first-quarter 2024, down from $576 million or $1.14 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 46 cents. The bottom line beat the Zacks Consensus Estimate of 36 cents.
Sales fell around 12% year over year to $5,389 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,375.6 million.
A decline in net fertilizer selling prices negatively impacted the company's financial results. This was somewhat balanced by increased earnings in the Retail division, higher sales volumes for fertilizers and reduced natural gas costs.
Sales in the Nutrien Ag Solutions (Retail) segment declined 3% year over year to $3,308 million in the quarter. The downside was primarily due to lower selling prices. The figure was higher than our estimate of $2,953.6 million.
The Potash division’s sales declined 19% year over year to $813 million, below our estimate of $901.9 million. North American sales volumes rose in the quarter compared with the same period in 2023, thanks to lower channel inventory and more typical purchasing behavior. Offshore sales volumes also saw a boost due to heightened demand in key international markets. Despite this, the net selling price per ton declined due to a fall in benchmark prices compared with robust prices in the first quarter of 2023. On the bright side, the cost of goods sold per tonne dropped, mainly owing to increased production volumes and reduced royalties.
Sales in the Nitrogen segment were $911 million, down around 31% year over year. In the reported quarter, sales volumes increased mainly because of higher production of urea and UAN, along with robust fertilizer demand. However, the upside was somewhat tempered by a decline in ammonia sales as the company optimized its product mix. The net selling price per ton for major nitrogen products dropped, influenced by weaker benchmark prices linked to lower energy costs in key nitrogen-producing regions. The reported figure was lower than our estimate of $1,210.5 million.
Sales in the Phosphate segment were $437 million, down around 15% year over year. The figure was higher than our estimate of $420.6 million. In the first quarter of 2024, sales volumes rose, driven by higher production and strong demand across fertilizer, industrial, and feed products. However, the net selling price per ton decreased, mainly due to a drop in fertilizer benchmark prices and lower prices in industrial and feed products. This reflects the usual delay in price realizations relative to benchmark trends.
Financials
At the end of the quarter, NTR had cash and cash equivalents of $496 million, down around 66% year over year. Long-term debt was $8,910 million, down nearly 6.3% year over year.
Cash used by operating activities was $487 million in the reported quarter.
Guidance
The Retail adjusted EBITDA guidance, set between $1.65 billion and $1.85 billion, reflects the company's forecast for increased crop nutrient sales volumes and profit margins in its North American operations during the first half of 2024, as well as improved crop input margins in Brazil during the second half of the year. This guidance also incorporates a full year of earnings from the company's Retail assets in Argentina, Chile and Uruguay.
For potash, the company's sales volume guidance, estimated between 13 and 13.8 million tons, assumes a more balanced distribution of volumes between the first and second halves compared to the prior year. The nitrogen sales volume guidance, ranging from 10.6 to 11.2 million tons, is based on higher operating rates at the company's North American and Trinidad plants, along with increased sales of upgraded products like urea and nitrogen solutions. Phosphate sales volume guidance, ranging from 2.6-2.8 million tons, anticipates higher operating rates compared with the 2023 tally.
Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.
The guidance for the effective tax rate on adjusted earnings has been lowered to a range of 23-25%, mainly due to a projected change in the geographic mix of earnings.
Price Performance
Nutrien’s shares have lost 12.5% in the past year compared with a 15.9% decline of the industry.
Sylvamo is slated to report first-quarter results on May 10. The consensus estimate for SLVM’s first-quarter earnings is pegged at $1.05. The company’s shares have rallied around 56% in the past year.
Integra Resources is expected to report first-quarter results on May 10. The Zacks Consensus Estimate for ITRG’s first-quarter earnings is pegged at a loss of 3 cents. The consensus estimate for ITRG’s first-quarter earnings has been stable in the past 60 days.
USAS is expected to report first-quarter results on May 20. The consensus estimate for USAS’s first-quarter earnings is pegged at a loss of 4 cents.
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Nutrien's (NTR) Q1 Earnings and Revenues Surpass Estimates
Nutrien Ltd. (NTR - Free Report) recorded profits of $165 million or 32 cents per share in first-quarter 2024, down from $576 million or $1.14 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 46 cents. The bottom line beat the Zacks Consensus Estimate of 36 cents.
Sales fell around 12% year over year to $5,389 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,375.6 million.
A decline in net fertilizer selling prices negatively impacted the company's financial results. This was somewhat balanced by increased earnings in the Retail division, higher sales volumes for fertilizers and reduced natural gas costs.
Nutrien Ltd. Price, Consensus and EPS Surprise
Nutrien Ltd. price-consensus-eps-surprise-chart | Nutrien Ltd. Quote
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment declined 3% year over year to $3,308 million in the quarter. The downside was primarily due to lower selling prices. The figure was higher than our estimate of $2,953.6 million.
The Potash division’s sales declined 19% year over year to $813 million, below our estimate of $901.9 million. North American sales volumes rose in the quarter compared with the same period in 2023, thanks to lower channel inventory and more typical purchasing behavior. Offshore sales volumes also saw a boost due to heightened demand in key international markets. Despite this, the net selling price per ton declined due to a fall in benchmark prices compared with robust prices in the first quarter of 2023. On the bright side, the cost of goods sold per tonne dropped, mainly owing to increased production volumes and reduced royalties.
Sales in the Nitrogen segment were $911 million, down around 31% year over year. In the reported quarter, sales volumes increased mainly because of higher production of urea and UAN, along with robust fertilizer demand. However, the upside was somewhat tempered by a decline in ammonia sales as the company optimized its product mix. The net selling price per ton for major nitrogen products dropped, influenced by weaker benchmark prices linked to lower energy costs in key nitrogen-producing regions. The reported figure was lower than our estimate of $1,210.5 million.
Sales in the Phosphate segment were $437 million, down around 15% year over year. The figure was higher than our estimate of $420.6 million. In the first quarter of 2024, sales volumes rose, driven by higher production and strong demand across fertilizer, industrial, and feed products. However, the net selling price per ton decreased, mainly due to a drop in fertilizer benchmark prices and lower prices in industrial and feed products. This reflects the usual delay in price realizations relative to benchmark trends.
Financials
At the end of the quarter, NTR had cash and cash equivalents of $496 million, down around 66% year over year. Long-term debt was $8,910 million, down nearly 6.3% year over year.
Cash used by operating activities was $487 million in the reported quarter.
Guidance
The Retail adjusted EBITDA guidance, set between $1.65 billion and $1.85 billion, reflects the company's forecast for increased crop nutrient sales volumes and profit margins in its North American operations during the first half of 2024, as well as improved crop input margins in Brazil during the second half of the year. This guidance also incorporates a full year of earnings from the company's Retail assets in Argentina, Chile and Uruguay.
For potash, the company's sales volume guidance, estimated between 13 and 13.8 million tons, assumes a more balanced distribution of volumes between the first and second halves compared to the prior year. The nitrogen sales volume guidance, ranging from 10.6 to 11.2 million tons, is based on higher operating rates at the company's North American and Trinidad plants, along with increased sales of upgraded products like urea and nitrogen solutions. Phosphate sales volume guidance, ranging from 2.6-2.8 million tons, anticipates higher operating rates compared with the 2023 tally.
Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.
The guidance for the effective tax rate on adjusted earnings has been lowered to a range of 23-25%, mainly due to a projected change in the geographic mix of earnings.
Price Performance
Nutrien’s shares have lost 12.5% in the past year compared with a 15.9% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Nutrien currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Sylvamo Corporation (SLVM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Integra Resources Corp. (ITRG - Free Report) and Americas Gold and Silver Corporation (USAS - Free Report) ,each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sylvamo is slated to report first-quarter results on May 10. The consensus estimate for SLVM’s first-quarter earnings is pegged at $1.05. The company’s shares have rallied around 56% in the past year.
Integra Resources is expected to report first-quarter results on May 10. The Zacks Consensus Estimate for ITRG’s first-quarter earnings is pegged at a loss of 3 cents. The consensus estimate for ITRG’s first-quarter earnings has been stable in the past 60 days.
USAS is expected to report first-quarter results on May 20. The consensus estimate for USAS’s first-quarter earnings is pegged at a loss of 4 cents.