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The fertilizer maker delivered an earnings surprise of 5.8%, on average, over the trailing four quarters. It posted an earnings surprise of 4.3% in the last reported quarter. The company’s second-quarter performance will likely reflect the benefits of strong demand and higher prices for fertilizers.
The company’s shares have gained 41.5% in the past year compared with a 53.9% surge of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The Zacks Consensus Estimate for Nutrien’s second-quarter consolidated sales is currently pegged at $15,360 million, calling for a rise of 57.3% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for net sales in the Phosphates segment is currently pegged at $642 million, calling for a year-over-year rise of 82.9%.
The consensus mark for net sales in the Potash segment is currently pegged at $2,864 million, suggesting a year-over-year rise of 250.6%.
The consensus mark for net sales in the Nitrogen segment is currently pegged at $2,481 million, indicating a year-over-year rise of 152.6%.
A Few Factors to Watch
The company is likely to have benefited from solid demand and higher prices for fertilizers in the second quarter, supported by strength in global agriculture markets. It is expected to have gained from strong potash sales volumes on the back of high domestic and overseas demand and actions to boost potash production. Nutrien is also likely to have gained from acquisitions, cost efficiency and increased adoption of its digital platform.
Global phosphate markets remain robust on solid demand and pricing dynamics. Potash prices have strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices, and low global inventory levels. Tight availability and firm demand are also contributing to phosphate prices globally. Lower global supply availability stemming from reduced operating rates, strong demand and a spike in energy prices are likely to have boosted nitrogen prices in the quarter to be reported.
However, the company is likely to have faced headwinds from higher natural gas prices. Natural gas is a major component in nitrogen production costs. Nutrien is seeing a rise in the cost of goods sold per ton for nitrogen due to higher natural gas costs. Higher gas costs might have impacted the company’s nitrogen margins in the June quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Nutrien this season. 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 Nutrien is -5.34%. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at $5.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nutrien currently carries a Zacks Rank #2.
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 Albemarle’s second-quarter earnings has been revised 21.5% upward in the past 60 days. The consensus estimate for ALB’s earnings for the quarter is currently pegged at $2.94.
Cabot Corporation (CBT - Free Report) , slated to release earnings on Aug 8, has an Earnings ESP of +0.16% and sports a Zacks Rank #1.
The consensus estimate for Cabot’s fiscal third-quarter earnings has been revised 1% upward in the past 60 days. The Zacks Consensus Estimate for CBT’s earnings for the quarter is pegged at $1.53.
Air Products and Chemicals, Inc. (APD - Free Report) , slated to release earnings on Aug 4, has an Earnings ESP of +0.29% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for Air Products’ fiscal third-quarter earnings has been stable over the past 60 days. The consensus estimate for APD’s earnings for the quarter stands at $2.61.
Image: Bigstock
Nutrien (NTR) to Post Q2 Earnings: What's in the Offing?
Nutrien Ltd. (NTR - Free Report) is set to release second-quarter 2022 results on Aug 3, after the closing bell.
The fertilizer maker delivered an earnings surprise of 5.8%, on average, over the trailing four quarters. It posted an earnings surprise of 4.3% in the last reported quarter. The company’s second-quarter performance will likely reflect the benefits of strong demand and higher prices for fertilizers.
The company’s shares have gained 41.5% in the past year compared with a 53.9% surge of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The Zacks Consensus Estimate for Nutrien’s second-quarter consolidated sales is currently pegged at $15,360 million, calling for a rise of 57.3% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for net sales in the Phosphates segment is currently pegged at $642 million, calling for a year-over-year rise of 82.9%.
The consensus mark for net sales in the Potash segment is currently pegged at $2,864 million, suggesting a year-over-year rise of 250.6%.
The consensus mark for net sales in the Nitrogen segment is currently pegged at $2,481 million, indicating a year-over-year rise of 152.6%.
A Few Factors to Watch
The company is likely to have benefited from solid demand and higher prices for fertilizers in the second quarter, supported by strength in global agriculture markets. It is expected to have gained from strong potash sales volumes on the back of high domestic and overseas demand and actions to boost potash production. Nutrien is also likely to have gained from acquisitions, cost efficiency and increased adoption of its digital platform.
Global phosphate markets remain robust on solid demand and pricing dynamics. Potash prices have strengthened on the back of robust global demand, aided by strong grower economics, higher crop prices, and low global inventory levels. Tight availability and firm demand are also contributing to phosphate prices globally. Lower global supply availability stemming from reduced operating rates, strong demand and a spike in energy prices are likely to have boosted nitrogen prices in the quarter to be reported.
However, the company is likely to have faced headwinds from higher natural gas prices. Natural gas is a major component in nitrogen production costs. Nutrien is seeing a rise in the cost of goods sold per ton for nitrogen due to higher natural gas costs. Higher gas costs might have impacted the company’s nitrogen margins in the June quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Nutrien this season. 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 Nutrien is -5.34%. The Zacks Consensus Estimate for second-quarter earnings is currently pegged at $5.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nutrien currently carries a Zacks Rank #2.
Nutrien Ltd. Price and EPS Surprise
Nutrien Ltd. price-eps-surprise | Nutrien Ltd. 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:
Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Aug 3, has an Earnings ESP of +8.38% 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 Albemarle’s second-quarter earnings has been revised 21.5% upward in the past 60 days. The consensus estimate for ALB’s earnings for the quarter is currently pegged at $2.94.
Cabot Corporation (CBT - Free Report) , slated to release earnings on Aug 8, has an Earnings ESP of +0.16% and sports a Zacks Rank #1.
The consensus estimate for Cabot’s fiscal third-quarter earnings has been revised 1% upward in the past 60 days. The Zacks Consensus Estimate for CBT’s earnings for the quarter is pegged at $1.53.
Air Products and Chemicals, Inc. (APD - Free Report) , slated to release earnings on Aug 4, has an Earnings ESP of +0.29% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for Air Products’ fiscal third-quarter earnings has been stable over the past 60 days. The consensus estimate for APD’s earnings for the quarter stands at $2.61.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.