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CF Industries (CF) to Report Q1 Earnings: What's in the Cards?
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CF Industries Holdings, Inc. (CF - Free Report) is set to release first-quarter 2022 results on May 4, after the closing bell.
The company’s first-quarter performance is likely to reflect the benefits of higher nitrogen prices and increased demand. However, high natural gas costs are likely to have affected margins in the to-be-reported quarter.
CF Industries beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters, while missing the same twice. The company has a trailing four-quarter earnings surprise of 0.02%, on average. The company reported an earnings surprise of 8.8% in the last reported quarter.
Shares of CF Industries have surged 95.2% in the past year compared with a 53.4% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Indicate?
The Zacks Consensus Estimate for CF Industries' first-quarter total sales is currently pegged at $2,597 million, indicating a 147.8% increase year over year.
The Zacks Consensus Estimate for total sales in the Ammonia segment is currently pegged at $587 million, calling for a 184.9% rise on a year-over-year basis. The same for the Granular Urea segment is $822 million, suggesting an increase of 106% year over year.
The consensus mark for the Urea Ammonium Nitrate Solution segment’s sales is currently pegged at $750 million, suggesting an increase of 223.3% year over year.
The Zacks Consensus Estimate for the Ammonium Nitrate segment’s total sales is currently pegged at $156 million, which indicates an increase of 48.5% year over year.
Factors at Play in Q1
CF Industries is likely to have benefited from higher nitrogen fertilizer demand in major markets in the first quarter. Global nitrogen demand is expected to have remained strong, driven by high crop commodity prices. Industrial demand recovered from the pandemic-related disruptions. Higher economic activities and high levels of corn-planted acres are likely to have contributed to higher industrial consumption of nitrogen products.
Strong nitrogen demand driven by higher commodity crop futures prices and higher nitrogen prices are likely to have boosted the company’s margins in the first quarter. Nitrogen prices are likely to have been driven by lower global supply availability resulting from reduced operating rates across Europe and Asia.
The company is also likely to have gained from continued strong demand for urea imports from Brazil and India. Higher crop prices, increased planted corn acres and improved farm economics have been supporting demand in Brazil.
Higher natural gas costs, stemming from an increase in natural gas costs in Europe and Asia, is likely to have affected results in the quarter. This increase in costs is likely to have impacted the company’s cost of sales and margins in the first quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for CF Industries is -1.66%. The Zacks Consensus Estimate is currently pegged at $4.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries currently sports a Zacks Rank #1.
CF Industries Holdings, Inc. Price and EPS Surprise
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for Westlake’s first-quarter earnings has been revised 3.9% upward in the past 60 days. The consensus estimate for WLK’s earnings for the quarter is currently pegged at $4.70.
Allegheny Technologies (ATI - Free Report) , slated to release earnings on May 4, has an Earnings ESP of +4.55% and sports a Zacks Rank #1.
The consensus estimate for Allegheny’s first-quarter earnings has been revised 4.8% upward in the past 60 days. The Zacks Consensus Estimate for ATI’s earnings for the quarter is pegged at 22 cents.
Olympic Steel, Inc. (ZEUS - Free Report) , scheduled to release earnings on May 5, has an Earnings ESP of +6.64% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Olympic Steel’s first-quarter earnings has been revised 7.1% upward in the past 60 days. The consensus estimate for ZEUS’s earnings for the quarter is currently pegged at $2.26.
Image: Bigstock
CF Industries (CF) to Report Q1 Earnings: What's in the Cards?
CF Industries Holdings, Inc. (CF - Free Report) is set to release first-quarter 2022 results on May 4, after the closing bell.
The company’s first-quarter performance is likely to reflect the benefits of higher nitrogen prices and increased demand. However, high natural gas costs are likely to have affected margins in the to-be-reported quarter.
CF Industries beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters, while missing the same twice. The company has a trailing four-quarter earnings surprise of 0.02%, on average. The company reported an earnings surprise of 8.8% in the last reported quarter.
Shares of CF Industries have surged 95.2% in the past year compared with a 53.4% rise of the industry.
Image Source: Zacks Investment Research
Let’s see how things have shaped up for this announcement.
What Do the Estimates Indicate?
The Zacks Consensus Estimate for CF Industries' first-quarter total sales is currently pegged at $2,597 million, indicating a 147.8% increase year over year.
The Zacks Consensus Estimate for total sales in the Ammonia segment is currently pegged at $587 million, calling for a 184.9% rise on a year-over-year basis. The same for the Granular Urea segment is $822 million, suggesting an increase of 106% year over year.
The consensus mark for the Urea Ammonium Nitrate Solution segment’s sales is currently pegged at $750 million, suggesting an increase of 223.3% year over year.
The Zacks Consensus Estimate for the Ammonium Nitrate segment’s total sales is currently pegged at $156 million, which indicates an increase of 48.5% year over year.
Factors at Play in Q1
CF Industries is likely to have benefited from higher nitrogen fertilizer demand in major markets in the first quarter. Global nitrogen demand is expected to have remained strong, driven by high crop commodity prices. Industrial demand recovered from the pandemic-related disruptions. Higher economic activities and high levels of corn-planted acres are likely to have contributed to higher industrial consumption of nitrogen products.
Strong nitrogen demand driven by higher commodity crop futures prices and higher nitrogen prices are likely to have boosted the company’s margins in the first quarter. Nitrogen prices are likely to have been driven by lower global supply availability resulting from reduced operating rates across Europe and Asia.
The company is also likely to have gained from continued strong demand for urea imports from Brazil and India. Higher crop prices, increased planted corn acres and improved farm economics have been supporting demand in Brazil.
Higher natural gas costs, stemming from an increase in natural gas costs in Europe and Asia, is likely to have affected results in the quarter. This increase in costs is likely to have impacted the company’s cost of sales and margins in the first quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for CF Industries is -1.66%. The Zacks Consensus Estimate is currently pegged at $4.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CF Industries currently sports a Zacks Rank #1.
CF Industries Holdings, Inc. Price and EPS Surprise
CF Industries Holdings, Inc. price-eps-surprise | CF Industries Holdings, Inc. Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Westlake Corporation (WLK - Free Report) , scheduled to release earnings on May 3, has an Earnings ESP of +12.98% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Westlake’s first-quarter earnings has been revised 3.9% upward in the past 60 days. The consensus estimate for WLK’s earnings for the quarter is currently pegged at $4.70.
Allegheny Technologies (ATI - Free Report) , slated to release earnings on May 4, has an Earnings ESP of +4.55% and sports a Zacks Rank #1.
The consensus estimate for Allegheny’s first-quarter earnings has been revised 4.8% upward in the past 60 days. The Zacks Consensus Estimate for ATI’s earnings for the quarter is pegged at 22 cents.
Olympic Steel, Inc. (ZEUS - Free Report) , scheduled to release earnings on May 5, has an Earnings ESP of +6.64% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Olympic Steel’s first-quarter earnings has been revised 7.1% upward in the past 60 days. The consensus estimate for ZEUS’s earnings for the quarter is currently pegged at $2.26.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.