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CVR Partners' (UAN) Earnings and Revenues Rise Y/Y in Q4

Zacks Equity Research

CVR Partners, LP UAN reported net loss of $1 million or a penny per share in fourth-quarter 2018, narrower than a net loss of $27 million or 24 cents in the year-ago quarter. Adjusted EBITDA came in at $33 million, up from $8 million in the year-ago quarter.  

CVR Partners generated net sales of $98.1 million, up around 25.5% year over year.

2018 Highlights

In 2018, the company reported net loss of $50 million or 44 cents per share, narrower than a net loss of $73 million or 64 cents. Revenues rose 6.1% year over year to $351.1 million.

CVR Partners, LP Price, Consensus and EPS Surprise

CVR Partners, LP Price, Consensus and EPS Surprise | CVR Partners, LP Quote

Operational Statistics

CVR Partners produced 209,000 tons of ammonia in the fourth quarter (up from 200,000 tons produced a year ago), of which, 59,000 net tons were available for sale and the rest was upgraded to other fertilizers. This includes 357,000 tons of urea ammonium nitrate ("UAN").

In the reported quarter, consolidated average realized gate prices for UAN and ammonia were $180 and $324 per ton, which were up around 36.4% and 22.7% year over year, respectively.

Financials

CVR Partners ended 2018 with cash and cash equivalents of $61.8 million, up around 25.6% year over year. Total debt increased to $629 million from $625.9 million a year ago.

Net cash provided from operating activities was $5.1 million during the fourth quarter.  

Outlook

Higher utilization rates and pricing supported fourth quarter and 2018 results, per CVR Partners. It also generated positive distributable cash in the fourth quarter and declared distribution of 12 cent per unit.

Going forward, the company expects the missed tonnage to be applied in the spring, considering a wet fall created unfavorable application conditions for nitrogen fertilizer. Additionally, it foresees corn planted this spring to increase 3-5 million acres. This is likely to boost demand for nitrogen fertilizer.

Price Performance

Shares of CVR Partners have gained 11% in a year’s time compared with the industry’s 5.1% rise.



Zacks Rank & Key Picks

CVR Partners currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd. KL, The Mosaic Company MOS and Silver Standard Resources Inc. SSRM. While Kirkland currently sports a Zacks Rank #1 (Strong Buy), Mosaic and Silver Standard Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 20.9% for 2019. The company’s shares have surged 117.4% in the past year.

Mosaic has an expected earnings growth rate of 23.5% for 2019. Its shares have rallied 21.9% in a year’s time.

Silver Standard Resources has an expected earnings growth rate of 29.2% for 2019. The company’s shares have surged 68.2% in a year’s time.

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