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Nutrien (NTR) Down 1% 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 1% 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 recorded fourth-quarter 2023 profits of $176 million or 35 cents per share, down from $1,118 million or $2.15 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 37 cents. The bottom line missed the Zacks Consensus Estimate of 72 cents.
Sales plunged around 25% year over year to $5,664 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,243.1 million.
The company's financial performance was impacted by lower net realized selling prices across all business segments and lower earnings from the Retail unit.
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment declined 14% year over year to $3,502 million in the quarter. The decline in the fourth quarter was primarily due to lower selling prices across all regions compared with the strong periods in 2022. The figure was higher than our estimate of $2,667.4 million.
Potash division’s sales declined 44% year over year to $776 million, higher than our estimate of $649.7 million. North American sales volumes rose in the fourth quarter due to lower channel inventory and increased grower demand, while offshore sales saw growth driven by Brazil and China. Despite higher volumes, net selling prices dropped in the quarter due to lower benchmark prices and higher costs due to logistical issues at Canpotex’s West Coast port facilities.
Sales in the Nitrogen segment were $877 million, down around 45% year over year. The fourth-quarter downside stemmed from reduced net realized selling prices across all major nitrogen products. Sales volumes increased during the same period primarily due to elevated UAN production and sales. However, this upside was partially offset by lower ammonia availability, mainly due to production outages at plants in Trinidad. The reported figure was lower than our estimate of $1,197.3 million.
Sales in the Phosphate segment were $472 million, up around 10% year over year. The figure was higher than our estimate of $393.1 million.Fourth-quarter sales volumes rose on the back of heightened demand for phosphate fertilizer, while production saw an uptick owing to enhanced reliability at the Aurora plant. During the same period, the net realized selling price declined primarily due to lower fertilizer net realized selling prices and reduced industrial and feed net realized selling prices. These declines reflect the typical lag in price realizations relative to spot fertilizer prices.
Financials
At the end of the quarter, Nutrien had cash and cash equivalents of $941 million, up around 4% year over year. Long-term debt was $8,913 million, up nearly 11% year over year.
Cash provided by operating activities was $4,150 million in the reported quarter.
FY23 Results
In 2023, Nutrien reported net earnings of $1.3 billion or $2.53 earnings per share compared with $14.18 a year ago. Adjusted earnings per share stood at $4.44 compared with $13.19 a year ago. The company recorded total sales of $29 billion for the year (down 23% year over year), with adjusted EBITDA reaching $6.1 billion.
Guidance
Nutrien projects a Retail adjusted EBITDA ranging from $1.65-$1.85 billion for 2024, anticipating increased gross margins across major product lines compared with 2023 levels. The company expects crop nutrient gross margins to benefit from higher sales volumes and per-ton margins, particularly rebounding from compressed levels in the prior year's first half, with an anticipated recovery in Brazilian crop protection margins in the latter half of 2024.
Potash sales volume guidance ranges from 13-13.8 million tons, reflecting anticipated demand growth in offshore markets and normalized Canpotex port operations. In North America, first-quarter sales volumes are expected to rise from the prior year’s levels due to robust customer engagement.
Nitrogen and phosphate sales volume guidance, ranging from 10.6-11.2 million tons and 2.6-2.8 million tons, respectively, anticipates higher operating rates compared to 2023.
Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.23% due to these changes.
VGM Scores
Currently, Nutrien has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nutrien has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutrien is part of the Zacks Fertilizers industry. Over the past month, Scotts Miracle-Gro (SMG - Free Report) , a stock from the same industry, has gained 24.7%. The company reported its results for the quarter ended December 2023 more than a month ago.
Scotts reported revenues of $410.4 million in the last reported quarter, representing a year-over-year change of -22.1%. EPS of -$1.45 for the same period compares with -$1.02 a year ago.
Scotts is expected to post earnings of $3.24 per share for the current quarter, representing a year-over-year change of -14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.8%.
Scotts has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Nutrien (NTR) Down 1% 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 1% 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 Q4 Earnings Miss, Revenues Beat Estimates
Nutrien recorded fourth-quarter 2023 profits of $176 million or 35 cents per share, down from $1,118 million or $2.15 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 37 cents. The bottom line missed the Zacks Consensus Estimate of 72 cents.
Sales plunged around 25% year over year to $5,664 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,243.1 million.
The company's financial performance was impacted by lower net realized selling prices across all business segments and lower earnings from the Retail unit.
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment declined 14% year over year to $3,502 million in the quarter. The decline in the fourth quarter was primarily due to lower selling prices across all regions compared with the strong periods in 2022. The figure was higher than our estimate of $2,667.4 million.
Potash division’s sales declined 44% year over year to $776 million, higher than our estimate of $649.7 million. North American sales volumes rose in the fourth quarter due to lower channel inventory and increased grower demand, while offshore sales saw growth driven by Brazil and China. Despite higher volumes, net selling prices dropped in the quarter due to lower benchmark prices and higher costs due to logistical issues at Canpotex’s West Coast port facilities.
Sales in the Nitrogen segment were $877 million, down around 45% year over year. The fourth-quarter downside stemmed from reduced net realized selling prices across all major nitrogen products. Sales volumes increased during the same period primarily due to elevated UAN production and sales. However, this upside was partially offset by lower ammonia availability, mainly due to production outages at plants in Trinidad. The reported figure was lower than our estimate of $1,197.3 million.
Sales in the Phosphate segment were $472 million, up around 10% year over year. The figure was higher than our estimate of $393.1 million. Fourth-quarter sales volumes rose on the back of heightened demand for phosphate fertilizer, while production saw an uptick owing to enhanced reliability at the Aurora plant. During the same period, the net realized selling price declined primarily due to lower fertilizer net realized selling prices and reduced industrial and feed net realized selling prices. These declines reflect the typical lag in price realizations relative to spot fertilizer prices.
Financials
At the end of the quarter, Nutrien had cash and cash equivalents of $941 million, up around 4% year over year. Long-term debt was $8,913 million, up nearly 11% year over year.
Cash provided by operating activities was $4,150 million in the reported quarter.
FY23 Results
In 2023, Nutrien reported net earnings of $1.3 billion or $2.53 earnings per share compared with $14.18 a year ago. Adjusted earnings per share stood at $4.44 compared with $13.19 a year ago. The company recorded total sales of $29 billion for the year (down 23% year over year), with adjusted EBITDA reaching $6.1 billion.
Guidance
Nutrien projects a Retail adjusted EBITDA ranging from $1.65-$1.85 billion for 2024, anticipating increased gross margins across major product lines compared with 2023 levels. The company expects crop nutrient gross margins to benefit from higher sales volumes and per-ton margins, particularly rebounding from compressed levels in the prior year's first half, with an anticipated recovery in Brazilian crop protection margins in the latter half of 2024.
Potash sales volume guidance ranges from 13-13.8 million tons, reflecting anticipated demand growth in offshore markets and normalized Canpotex port operations. In North America, first-quarter sales volumes are expected to rise from the prior year’s levels due to robust customer engagement.
Nitrogen and phosphate sales volume guidance, ranging from 10.6-11.2 million tons and 2.6-2.8 million tons, respectively, anticipates higher operating rates compared to 2023.
Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -13.23% due to these changes.
VGM Scores
Currently, Nutrien has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nutrien has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutrien is part of the Zacks Fertilizers industry. Over the past month, Scotts Miracle-Gro (SMG - Free Report) , a stock from the same industry, has gained 24.7%. The company reported its results for the quarter ended December 2023 more than a month ago.
Scotts reported revenues of $410.4 million in the last reported quarter, representing a year-over-year change of -22.1%. EPS of -$1.45 for the same period compares with -$1.02 a year ago.
Scotts is expected to post earnings of $3.24 per share for the current quarter, representing a year-over-year change of -14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.8%.
Scotts has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.