It has been about a month since the last earnings report for Nutrien (NTR Quick QuoteNTR - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Nutrien due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Nutrien's Earnings and Sales Miss Estimates in Q2

Nutrien logged profits of $1.1 billion or $1.94 per share in second-quarter 2021, up from a profit of $765 million or $1.34 in the year-ago quarter.

Barring one-time items, adjusted earnings per share were $2.08 that missed the Zacks Consensus Estimate of $2.09.

Sales rose roughly 16% year over year to $9,763 million in the quarter. However, the figure lagged the Zacks Consensus Estimate of $9,989 million. The company benefited from earnings growth in the Nutrien Ag Solutions segment, higher net realized selling prices and higher potash sales volumes.

Segment Highlights

Sales in the Nutrien Ag Solutions segment rose roughly 11% year over year to $7,537 million in the quarter. Sales of crop nutrients increased significantly in the quarter on higher prices. Sales of crop protection products also increased on the back of market growth and favorable application conditions.

Potash division’s sales climbed around 39% year over year to $817 million driven by strong volumes and higher net realized selling prices. Sales volumes in the segment were driven by strong demand in North America and offshore markets while prices increased on strong demand and tight supply.
 
Sales in the Nitrogen segment were $982 million, up around 41% year over year, driven by higher net realized selling prices which more than offset a decline in sales volumes, reduced equity earnings and higher natural gas costs. Prices of nitrogen rose on the strength in global agriculture markets and a recovery in industrial nitrogen demand.

Sales in the Phosphate segment were $351 million, up around 40% year over year on the back of higher net realized selling prices. Sales volumes fell partly due to the timing of turnaround activity.

Financials

At the end of the quarter, Nutrien had cash and cash equivalents of $1,794 million, up around 27% year over year. Long-term debt fell modestly year over year to $10,029 million.

The company generated $1.9 billion in free cash flow in the first half of 2021.

Outlook

The company raised its adjusted net earnings per share and adjusted EBITDA guidance to $4.60-$5.10 (from $2.55-$3.25) and $6-$6.4 billion (from $4.4-$4.9 billion), respectively, for full-year 2021. The revision reflects higher expected results across its business and the benefits of increasing its potash sales guidance for 2021 by one million tons.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 39.03% due to these changes.

VGM Scores

At this time, Nutrien has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Nutrien has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.