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CF Industries' (CF) Earnings & Sales Miss Estimates in Q3

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Zacks Equity Research
·4 min read
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CF Industries Holdings, Inc. CF reported a net loss of $28 million or 13 cents per share in the third quarter of 2020 against profits of $65 million or 29 cents in the year-ago quarter. Also, loss per share missed the Zacks Consensus Estimate of earnings of 5 cents.

Net sales fell 18.4% year over year to $847 million in the quarter. The figure also trailed the Zacks Consensus Estimate of $895.2 million.

Per the company, average selling prices in the reported quarter were lower on a year-over-year basis across all segments due to increased global supply availability.

CF Industries Holdings, Inc. Price, Consensus and EPS Surprise

CF Industries Holdings, Inc. Price, Consensus and EPS Surprise
CF Industries Holdings, Inc. Price, Consensus and EPS Surprise

CF Industries Holdings, Inc. price-consensus-eps-surprise-chart | CF Industries Holdings, Inc. Quote

Segment Review

Net sales in the Ammonia segment fell 11.8% year over year to $165 million in the reported quarter. For the first nine months, sales volume rose on the back of greater supply availability. Average selling prices of ammonia fell year over year in the quarter, impacted by higher global supply.  

Sales in the Granular Urea segment declined 23.9% year over year to $249 million. Average selling prices for urea declined for the first nine months due to increased global supply availability.  

Sales in the UAN segment fell 19.7% year over year to $248 million. Sales volumes rose year over year for the first nine month, while average selling prices declined due to higher global supply availability.

Sales in the AN segment declined 19.9% year over year to $109 million. Sales volumes rose year over year for the first nine months but average selling prices declined due to increased global supply availability.

Financials

CF Industries’ cash and cash equivalents fell 45.7% year over year to $553 million in the third quarter. Long-term debt was $3,960 million at the end of the quarter, down 5.8% year over year.

Cash flow from operations amounted to $223 million in the reported quarter, down 56.3% year over year.  

Outlook

CF Industries expects continued positive demand in North America, India and Brazil in 2021. The company projects around 90 million planted corn acres in the United States in 2021. It expects healthy level of corn planting as well as expected rise in wheat and canola acreage to support nitrogen demand in North America. Also, the company sees global nitrogen requirements to remain robust, which is likely to be driven by strong demand for urea imports from India and Brazil.

Price Performance

Shares of CF Industries have lost 42.5% in the past year compared with the industry’s 10.5% decline.



Zacks Rank & Key Picks

CF Industries currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and B2Gold Corp BTG. While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), Barrick and B2Gold carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has an expected earnings growth rate of 100% for 2020. Its shares have returned 34.1% in the past year.

Barrick has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 62.9% in the past year.

B2Gold has an expected earnings growth rate of 250% for 2020. The company’s shares have gained 77.1% in the past year.

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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
 
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