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Why Is CF (CF) Up 7.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for CF Industries (CF - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CF due for a pullback? 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.
CF Industries’ Earnings and Sales Beat Estimates in Q3
CF Industries reported third-quarter 2024 earnings of $1.55 per share, up from 85 cents in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.05.
Net sales rose around 8% year over year to roughly $1.37 billion in the quarter, beating the Zacks Consensus Estimate of $1.21 billion.
Average selling prices in the third quarter were higher year over year due to increased average selling prices for ammonia from lower global supply availability partly resulting from lower natural gas availability in Trinidad and Egypt. Sales volumes were flat year over year as higher ammonia sales volumes were offset by lower UAN sales volumes.
Segment Highlights
Net sales in the Ammonia segment climbed 50% year over year to $353 million in the reported quarter, beating our estimate of $219.5 million. Ammonia adjusted gross margin per ton fell in the first nine months of 2024 from the same period in 2023, mostly due to lower average selling prices and increased maintenance expenses, which were slightly offset by lower realized natural gas costs.
Sales in the Granular Urea segment increased around 8% year over year to $388 million, topping our estimate of $326.8 million. Granular urea adjusted gross margin per ton declined in the first nine months of 2024 from the same period in 2023, owing to lower average selling prices and the impact of purchased volumes of granular urea to satisfy customer commitments, which was somewhat offset by reduced realized natural gas costs.
Sales in the UAN segment fell around 7% year over year to $406 million. It was above our estimate of $379.7 million. UAN adjusted gross margin per ton declined in the in the first nine months of 2024 from the same period in 2023, mainly due to lower average selling prices offset by reduced realized natural gas costs.
Sales in the AN segment fell around 7% year over year to $106 million. It was above our estimate of $91.7 million. AN adjusted gross margin per ton declined in first nine months of 2024 from the same period in 2023, owing to lower average selling prices, which were partly offset by lower maintenance and realized natural gas costs.
Financials
As of Sept. 30, 2024, CF Industries’ cash and cash equivalents were $1.88 billion, up 3% sequentially. Long-term debt was $2.97 billion, stable sequentially.
The company repurchased 6.1 million shares for $476 million in the reported quarter.
Outlook
Per CF Industries, nitrogen prices globally were aided in the third quarter by strong global nitrogen demand and reduced supply availability due to natural gas shortages in Trinidad and Egypt, the absence of China from the urea export market and planned maintenance activities in the Middle East. For the near term, management anticipates the global supply-demand balance to remain constructive, as inventories are believed to be below average globally while energy spreads remain significant between North America and high-cost production in Europe.
CF Industries expects capital expenditures for 2024 to be around $525 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, CF has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CF 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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Why Is CF (CF) Up 7.8% Since Last Earnings Report?
A month has gone by since the last earnings report for CF Industries (CF - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CF due for a pullback? 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.
CF Industries’ Earnings and Sales Beat Estimates in Q3
CF Industries reported third-quarter 2024 earnings of $1.55 per share, up from 85 cents in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.05.
Net sales rose around 8% year over year to roughly $1.37 billion in the quarter, beating the Zacks Consensus Estimate of $1.21 billion.
Average selling prices in the third quarter were higher year over year due to increased average selling prices for ammonia from lower global supply availability partly resulting from lower natural gas availability in Trinidad and Egypt. Sales volumes were flat year over year as higher ammonia sales volumes were offset by lower UAN sales volumes.
Segment Highlights
Net sales in the Ammonia segment climbed 50% year over year to $353 million in the reported quarter, beating our estimate of $219.5 million. Ammonia adjusted gross margin per ton fell in the first nine months of 2024 from the same period in 2023, mostly due to lower average selling prices and increased maintenance expenses, which were slightly offset by lower realized natural gas costs.
Sales in the Granular Urea segment increased around 8% year over year to $388 million, topping our estimate of $326.8 million. Granular urea adjusted gross margin per ton declined in the first nine months of 2024 from the same period in 2023, owing to lower average selling prices and the impact of purchased volumes of granular urea to satisfy customer commitments, which was somewhat offset by reduced realized natural gas costs.
Sales in the UAN segment fell around 7% year over year to $406 million. It was above our estimate of $379.7 million. UAN adjusted gross margin per ton declined in the in the first nine months of 2024 from the same period in 2023, mainly due to lower average selling prices offset by reduced realized natural gas costs.
Sales in the AN segment fell around 7% year over year to $106 million. It was above our estimate of $91.7 million. AN adjusted gross margin per ton declined in first nine months of 2024 from the same period in 2023, owing to lower average selling prices, which were partly offset by lower maintenance and realized natural gas costs.
Financials
As of Sept. 30, 2024, CF Industries’ cash and cash equivalents were $1.88 billion, up 3% sequentially. Long-term debt was $2.97 billion, stable sequentially.
The company repurchased 6.1 million shares for $476 million in the reported quarter.
Outlook
Per CF Industries, nitrogen prices globally were aided in the third quarter by strong global nitrogen demand and reduced supply availability due to natural gas shortages in Trinidad and Egypt, the absence of China from the urea export market and planned maintenance activities in the Middle East. For the near term, management anticipates the global supply-demand balance to remain constructive, as inventories are believed to be below average globally while energy spreads remain significant between North America and high-cost production in Europe.
CF Industries expects capital expenditures for 2024 to be around $525 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, CF has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CF has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.