CVR Partners, LP (UAN Quick QuoteUAN - Free Report) is set to release first-quarter 2018 results, ahead of the bell on Apr 26.

 

The company reported a negative earnings surprise of 71.4% in fourth-quarter 2017. CVR Partners reported a loss of $27.4 million or 24 cents per share, higher than a loss of $14.5 million or 13 cents it logged a year ago. The reported loss per share was wider than the Zacks Consensus Estimate of a loss of 14 cents.

 

The company raked in net sales of $78.2 million in the quarter, down around 8% year over year. 

 

The company’s results in the quarter were affected by unscheduled downtime at the East Dubuque fertilizer facility and a few maintenance days on the urea ammonium nitrate (UAN Quick QuoteUAN - Free Report) plant at Coffeyville. Reduced ammonia and UAN sales prices also affected the results.

 

CVR Partners missed earnings estimates in three of the trailing four quarters with an average negative surprise of 144.1%.

 

CVR Partners’ shares have declined around 36.5% over a year, underperforming the industry’s 22.9% gain.

 

 

 

 

Let’s take a look at how things are shaping up for this announcement.

 

 

CVR Partners is exposed to pricing pressure stemming from lower nitrogen fertilizer prices, as witnessed in the last reported quarter. UAN prices fell by a roughly 10% in fourth-quarter 2017. Urea prices have been under pressure due to excess nitrogen supply. Ammonia prices also slipped around 25% in the last quarter. 

 

However, CVR Partners, during its fourth-quarter call, said that it has been witnessing lower nitrogen product imports, steady customer demand and higher prices for nitrogen. The company also noted that most industry participants are expecting around 90 million corn acres to be planted for the spring season.

 

Meanwhile, the company remains committed to ramp up its UAN production capacity. It should also benefit from the Rentech acquisition and healthy demand for nitrogen.

 

With the buyout of Rentech Nitrogen Partners, the company has been able to create an entity with larger scale, enhance production capacity and increase operating reach. The combined company is now the second-biggest producer of UAN in North America.

 

 

 

 

Our proven model does not show that CVR Partners is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here as you will see below:

 

Zacks ESP: CVR Partners has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 13 cents per share.  You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 

Zacks Rank: CVR Partners carries a Zacks Rank #5 (Strong Sell). Note that stocks with a Zacks Rank #4 (Sell) or 5 should never be considered going into an earnings announcement.

 

 

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

 

WestRock Company has an Earnings ESP of +2.32% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Univar Inc. has an Earnings ESP of +2.63% and sports a Zacks Rank #1.

 

FMC Corporation (FMC Quick QuoteFMC - Free Report) has an Earnings ESP of +1.43% and carries a Zacks Rank #2. 

 

 

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