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Nutrien (NTR) Q2 Earnings Beat Estimates, Revenues Miss
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Nutrien Ltd. (NTR - Free Report) recorded profits of $392 million or 78 cents per share in second-quarter 2024, down from $448 million or 89 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $2.34. The bottom line beat the Zacks Consensus Estimate of $2.13.
Sales fell around 13% year over year to $10,156 million in the quarter. The figure missed the Zacks Consensus Estimate of $10,893.1 million.
Sales in the Nutrien Ag Solutions (Retail) segment declined 12% year over year to $8,074 million in the quarter. The downside was primarily due to lower selling prices. The figure was lower than our estimate of $8,824.7 million.
The Potash division reported a 25% year-over-year sales decline, totaling $756 million. The metric fell short of our estimate of $860.3 million. Sales volumes rose in the reported quarter owing to increased offshore demand. Still, they were partially offset by lower volumes in North America, attributed to more typical seasonal purchasing patterns compared to the same period in 2023. Strong demand in key offshore markets and low channel inventories in North America at the start of 2024 drove record sales volume in the first half. However, the net selling price per ton dropped in the second quarter and the first half of 2024 due to lower benchmark prices compared with last year’s tally. The cost of goods sold per ton also declined during these periods, primarily because of higher production volumes and reduced royalties.
The Nitrogen segment posted sales of $1,028 million, down approximately 15% year over year. The figure was slightly below our estimate of $1,033.8 million. Sales volumes in the second quarter were affected by wet weather in North America, which disrupted the timing of nitrogen applications. First-half sales volumes remained flat compared with the same period in 2023. The net selling price per ton declined for all major nitrogen products in the second quarter and first half of 2024, primarily due to weaker benchmark prices in key nitrogen-producing regions. The cost of goods sold per ton also fell during these periods, mainly due to lower natural gas costs.
The Phosphate segment generated sales of $394 million, down around 22% year over year. This figure exceeded our estimate of $233.3 million. Sales volumes in the said quarter remained flat compared with the same period’s figure last year, with lower fertilizer volumes being offset by higher feed volumes. For the first half of 2024, sales volumes were higher than first-half 2023 levels due to strong demand for fertilizer, industrial and feed products. The net selling price per ton declined in the second quarter and the first half of 2024, primarily due to lower industrial and feed net selling prices, which typically lag behind benchmark prices. The cost of goods sold per ton also fell during these periods, mainly due to lower ammonia and sulfur input costs.
Financials
At the end of the quarter, NTR had cash and cash equivalents of $1,004 million, up around 36% year over year. Long-term debt was $9,399 million, down nearly 1% year over year.
Cash provided by operating activities was $1,807 million in the reported quarter.
Guidance
The Retail adjusted EBITDA guidance has been revised downward to a range of $1.5-$1.7 billion, primarily due to current market instability in Brazil and delayed planting in North America during the second quarter. Potash sales volume guidance has been increased to 13.2-13.8 million tons, driven by expectations of higher global demand in 2024. This range accounts for the potential impact of a relatively short Canadian rail strike in the second half of the year.
Nitrogen sales volume guidance has been narrowed to 10.7-11.1 million tons, as NTR anticipates higher operating rates at its North American and Trinidad plants, along with growth in sales of upgraded products such as urea and nitrogen solutions. Phosphate sales volume guidance has been lowered to 2.5-2.6 million tons, reflecting extended turnaround activities and delays in moving mine equipment.
Finance costs guidance has been reduced to $0.7-$0.8 million due to a lower expected average short-term debt balance. Total capital expenditures are projected to be $2.2-$2.3 billion. The effective tax rate on adjusted earnings has been projected at 23-25%.
Price Performance
Nutrien’s shares have lost 30.6% in the past year compared with a 31.8% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Nutrien currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Franco-Nevada Corporation (FNV - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Barrick Gold Corporation (GOLD - Free Report) . Franco-Nevada and Avino Silversport a Zacks Rank #1 (Strong Buy), while Barrick carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%. It is scheduled to release second-quarter results on Aug 13.
The Zacks Consensus Estimate for ASM’s current-year earnings is pegged at 5 cents, indicating a year-over-year rise of 25%. The consensus estimate for ASM’s earnings has increased by 25% in the past 60 days. The company’s shares have increased 24.4% in the past year. It is slated to report second-quarter results on Aug 13.
The Zacks Consensus Estimate for Barrick's current-year earnings is pegged at $1.16, indicating a rise of 38.1% from year-ago levels. The consensus estimate for GOLD’s earnings has increased 9% in the past 60 days. The company’s shares have increased 2% in the past year. GOLD will release second-quarter results on Aug 12.
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Nutrien (NTR) Q2 Earnings Beat Estimates, Revenues Miss
Nutrien Ltd. (NTR - Free Report) recorded profits of $392 million or 78 cents per share in second-quarter 2024, down from $448 million or 89 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $2.34. The bottom line beat the Zacks Consensus Estimate of $2.13.
Sales fell around 13% year over year to $10,156 million in the quarter. The figure missed the Zacks Consensus Estimate of $10,893.1 million.
Nutrien Ltd. Price, Consensus and EPS Surprise
Nutrien Ltd. price-consensus-eps-surprise-chart | Nutrien Ltd. Quote
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment declined 12% year over year to $8,074 million in the quarter. The downside was primarily due to lower selling prices. The figure was lower than our estimate of $8,824.7 million.
The Potash division reported a 25% year-over-year sales decline, totaling $756 million. The metric fell short of our estimate of $860.3 million. Sales volumes rose in the reported quarter owing to increased offshore demand. Still, they were partially offset by lower volumes in North America, attributed to more typical seasonal purchasing patterns compared to the same period in 2023. Strong demand in key offshore markets and low channel inventories in North America at the start of 2024 drove record sales volume in the first half. However, the net selling price per ton dropped in the second quarter and the first half of 2024 due to lower benchmark prices compared with last year’s tally. The cost of goods sold per ton also declined during these periods, primarily because of higher production volumes and reduced royalties.
The Nitrogen segment posted sales of $1,028 million, down approximately 15% year over year. The figure was slightly below our estimate of $1,033.8 million. Sales volumes in the second quarter were affected by wet weather in North America, which disrupted the timing of nitrogen applications. First-half sales volumes remained flat compared with the same period in 2023. The net selling price per ton declined for all major nitrogen products in the second quarter and first half of 2024, primarily due to weaker benchmark prices in key nitrogen-producing regions. The cost of goods sold per ton also fell during these periods, mainly due to lower natural gas costs.
The Phosphate segment generated sales of $394 million, down around 22% year over year. This figure exceeded our estimate of $233.3 million. Sales volumes in the said quarter remained flat compared with the same period’s figure last year, with lower fertilizer volumes being offset by higher feed volumes. For the first half of 2024, sales volumes were higher than first-half 2023 levels due to strong demand for fertilizer, industrial and feed products. The net selling price per ton declined in the second quarter and the first half of 2024, primarily due to lower industrial and feed net selling prices, which typically lag behind benchmark prices. The cost of goods sold per ton also fell during these periods, mainly due to lower ammonia and sulfur input costs.
Financials
At the end of the quarter, NTR had cash and cash equivalents of $1,004 million, up around 36% year over year. Long-term debt was $9,399 million, down nearly 1% year over year.
Cash provided by operating activities was $1,807 million in the reported quarter.
Guidance
The Retail adjusted EBITDA guidance has been revised downward to a range of $1.5-$1.7 billion, primarily due to current market instability in Brazil and delayed planting in North America during the second quarter. Potash sales volume guidance has been increased to 13.2-13.8 million tons, driven by expectations of higher global demand in 2024. This range accounts for the potential impact of a relatively short Canadian rail strike in the second half of the year.
Nitrogen sales volume guidance has been narrowed to 10.7-11.1 million tons, as NTR anticipates higher operating rates at its North American and Trinidad plants, along with growth in sales of upgraded products such as urea and nitrogen solutions. Phosphate sales volume guidance has been lowered to 2.5-2.6 million tons, reflecting extended turnaround activities and delays in moving mine equipment.
Finance costs guidance has been reduced to $0.7-$0.8 million due to a lower expected average short-term debt balance. Total capital expenditures are projected to be $2.2-$2.3 billion. The effective tax rate on adjusted earnings has been projected at 23-25%.
Price Performance
Nutrien’s shares have lost 30.6% in the past year compared with a 31.8% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Nutrien currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Franco-Nevada Corporation (FNV - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Barrick Gold Corporation (GOLD - Free Report) . Franco-Nevada and Avino Silversport a Zacks Rank #1 (Strong Buy), while Barrick carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.27. The consensus estimate for FNV’s earnings has increased by 3% in the past 60 days. FNV beat the consensus estimate in the last four quarters, with the average earnings surprise being 10.5%. It is scheduled to release second-quarter results on Aug 13.
The Zacks Consensus Estimate for ASM’s current-year earnings is pegged at 5 cents, indicating a year-over-year rise of 25%. The consensus estimate for ASM’s earnings has increased by 25% in the past 60 days. The company’s shares have increased 24.4% in the past year. It is slated to report second-quarter results on Aug 13.
The Zacks Consensus Estimate for Barrick's current-year earnings is pegged at $1.16, indicating a rise of 38.1% from year-ago levels. The consensus estimate for GOLD’s earnings has increased 9% in the past 60 days. The company’s shares have increased 2% in the past year. GOLD will release second-quarter results on Aug 12.