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Nutrien (NTR) Down 8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Nutrien (NTR - Free Report) . Shares have lost about 8% 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 its most recent earnings report in order to get a better handle on the important drivers.
Nutrien's Q1 Earnings Surpass Estimates, Sales Lag
Nutrien recorded profits of $1,385 million or $2.49 per share in first-quarter 2022, up from a profit of $133 million or 22 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $2.70. The bottom line topped the Zacks Consensus Estimate of $2.59.
Sales climbed around 64% year over year to $7,657 million in the quarter. The figure, however, missed the Zacks Consensus Estimate of $7,766.8 million. The company benefited from higher selling prices and strong Retail performance in the quarter. This was offset by a reduction in fertilizer sales volumes mainly due to a delayed start to the planting season in North America.
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment rose 30% year over year to $3,861 million in the quarter. Sales of crop nutrients increased in the quarter on higher prices. Sales of crop protection products also increased owing to higher selling prices, strong demand and favorable application conditions in Australia.
Potash division’s sales surged 203% year over year to $1,850 million driven by higher net realized selling prices. Sales volumes in the segment fell due to the delayed planting in North America. Selling prices increased on the back of strong demand and tight supply.
Sales in the Nitrogen segment were $1,462 million, up around 155% year over year. The upside can be attributed to higher net realized selling prices, which offset lower volumes. Sales volume fell due to plant outages impacting ammonia and urea production, and the delayed planting in North America.
Sales in the Phosphate segment were $563 million, up 64% year over year on the back of higher net realized selling price. Prices rose in sync with an increase in global benchmark prices. Volumes declined due to the delayed planting.
Financials
At the end of the quarter, Nutrien had cash and cash equivalents of $577 million, down around 19% year over year. Long-term debt was $7,519 million, down roughly 25% year over year.
Cash used in operating activities was $62 million for the reported quarter.
The company repurchased around 9 million shares year-to-date as of Apr 29, 2022, for a total of roughly $740 million.
Guidance
Nutrien raised its full-year 2022 adjusted EBITDA guidance and full-year adjusted net earnings per share guidance factoring in the expectation of higher realized selling prices, higher potash sales volumes and higher Retail crop nutrients and crop protection products gross margins.
The company now expects adjusted EBITDA of $14.5-$16.5 billion (up from $10-$11.2 billion) for full-year 2022. Adjusted EPS has been forecast in the band of $16.20-$18.70 (up from $10.20-$11.80). Nutrien also sees sustaining capital expenditure of $1.2-$1.3 billion in 2022.
The company also now sees potash sales volumes of between 14.5 million and 15.1 million tons in 2022. Nitrogen sales volumes are now projected in the band of 10.7-11.1 million tons for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 11.55% due to these changes.
VGM Scores
At this time, Nutrien has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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.
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Nutrien (NTR) Down 8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Nutrien (NTR - Free Report) . Shares have lost about 8% 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 its most recent earnings report in order to get a better handle on the important drivers.
Nutrien's Q1 Earnings Surpass Estimates, Sales Lag
Nutrien recorded profits of $1,385 million or $2.49 per share in first-quarter 2022, up from a profit of $133 million or 22 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share (EPS) were $2.70. The bottom line topped the Zacks Consensus Estimate of $2.59.
Sales climbed around 64% year over year to $7,657 million in the quarter. The figure, however, missed the Zacks Consensus Estimate of $7,766.8 million. The company benefited from higher selling prices and strong Retail performance in the quarter. This was offset by a reduction in fertilizer sales volumes mainly due to a delayed start to the planting season in North America.
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment rose 30% year over year to $3,861 million in the quarter. Sales of crop nutrients increased in the quarter on higher prices. Sales of crop protection products also increased owing to higher selling prices, strong demand and favorable application conditions in Australia.
Potash division’s sales surged 203% year over year to $1,850 million driven by higher net realized selling prices. Sales volumes in the segment fell due to the delayed planting in North America. Selling prices increased on the back of strong demand and tight supply.
Sales in the Nitrogen segment were $1,462 million, up around 155% year over year. The upside can be attributed to higher net realized selling prices, which offset lower volumes. Sales volume fell due to plant outages impacting ammonia and urea production, and the delayed planting in North America.
Sales in the Phosphate segment were $563 million, up 64% year over year on the back of higher net realized selling price. Prices rose in sync with an increase in global benchmark prices. Volumes declined due to the delayed planting.
Financials
At the end of the quarter, Nutrien had cash and cash equivalents of $577 million, down around 19% year over year. Long-term debt was $7,519 million, down roughly 25% year over year.
Cash used in operating activities was $62 million for the reported quarter.
The company repurchased around 9 million shares year-to-date as of Apr 29, 2022, for a total of roughly $740 million.
Guidance
Nutrien raised its full-year 2022 adjusted EBITDA guidance and full-year adjusted net earnings per share guidance factoring in the expectation of higher realized selling prices, higher potash sales volumes and higher Retail crop nutrients and crop protection products gross margins.
The company now expects adjusted EBITDA of $14.5-$16.5 billion (up from $10-$11.2 billion) for full-year 2022. Adjusted EPS has been forecast in the band of $16.20-$18.70 (up from $10.20-$11.80). Nutrien also sees sustaining capital expenditure of $1.2-$1.3 billion in 2022.
The company also now sees potash sales volumes of between 14.5 million and 15.1 million tons in 2022. Nitrogen sales volumes are now projected in the band of 10.7-11.1 million tons for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 11.55% due to these changes.
VGM Scores
At this time, Nutrien has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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.