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CF Industries (CF) to Post Q1 Earnings: What's in the Cards?

Zacks Equity Research

CF Industries Holdings, Inc. CF is set to release first-quarter 2019 results on May1, after market close.

The stock has gained 16.4% in the past year compared with the industry’s 1.4% rise.



Few of the Factors at Play

CF Industries expects to witness strong nitrogen fertilizer demand in North America during the first half of 2019. Corn and wheat plantings in the United States are expected to rise by 4 million and 1 million acres, respectively, compared with 2018 levels.

Per the company, nitrogen prices declined globally through the end of 2018 and into 2019 after reaching highs early in the fourth quarter. The downside was caused by seasonally low demand in the Northern Hemisphere and moderate energy prices across Asia and Europe. However, CF Industries noted that industry fundamentals is likely to support global nitrogen prices during first-half 2019 as demand in the Northern Hemisphere increase.

What do the Estimates Say?

The Zacks Consensus Estimate for CF Industries' first-quarter total sales is currently pegged at $1,016 million, suggesting a rise of roughly 6.2% from the year-ago quarter’s figure.

For the first quarter, the Zacks Consensus Estimate for total sales in the Ammonia segment is currently pegged at $327 million, calling for an increase of 54.2% year over year.

The Zacks Consensus Estimate for total sales in the Granular Urea segment is currently pegged at $274 million, indicating a riseof 3.8% year over year. The same for the urea ammonium nitrate solution (“UAN”) segment is pegged at $298 million, calling for a rise of 5.3% year over year.

Moreover, the Zacks Consensus Estimate for total sales in the ammonium nitrate (AN) segment is pegged at $103 million, suggesting a rise of 3% year over year.

Zacks Model

Our proven model does not show that CF Industries is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for CF Industries is -2.29%. The Zacks Consensus Estimate is currently pegged at 28 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 #3, which when combined with a negative ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or #5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

CF Industries Holdings, Inc. Price and EPS Surprise

CF Industries Holdings, Inc. Price and EPS Surprise | CF Industries Holdings, Inc. Quote

Stocks Poised to Beat Estimates

Here are some companies in the same space you may want to consider as our model shows that they have the right combination of elements to beat estimates.

Intrepid Potash, Inc IPI has an Earnings ESP of +25.00% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity Corporation NGVT has an Earnings ESP of +6.77% and carries a Zacks Rank #3.

Ternium S.A. TX has an Earnings ESP of +6.21% and carries a Zacks Rank #3.

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