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CF Industries (CF) Down 4.7% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CF Industries Holdings, Inc. (CF - Free Report) . Shares have lost about 4.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is CF due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CF Industries' Q4 Earnings, Revenues Top Estimates
CF Industries swung to a profit in the fourth quarter of 2017, aided by a sizable tax benefit. The company logged a profit of $465 million or $1.98 per share in the reported quarter compared with a loss of $320 million or $1.38 per share a year ago. The company recorded a tax benefit of $491 million related to the U.S. Tax Cuts and Jobs Act in the reported quarter.
Barring one-time items, adjusted loss came in at 2 cents per share for the quarter, which was narrower than the Zacks Consensus Estimate of a loss of 11 cents.
Net sales increased roughly 27% year over year to $1,099 million in the quarter. It also beat the Zacks Consensus Estimate of $1,039 million. Sales were driven by increased volumes across most segments and higher selling prices across all segments.
FY17 Results
For 2017, profit was $358 million or $1.53 per share, compared with a loss of $277 million or $1.19 per share logged a year ago. Adjusted loss per share for the year was 25 cents.
Revenues for the full year rose 12% year over year to $4,130 million.
Segment Review
Net sales for the Ammonia segment climbed roughly 63% year over year to $344 million in the reported quarter. Ammonia sales volumes rose 58% year over year to 1,207,000 tons owing to additional production volumes from Donaldsonville and Port Neal complexes and higher demand for fall agricultural applications. Average selling prices rose 3% year over year to $285 per ton, aided by a tighter global nitrogen supply and demand balance.
Sales for the Granular Urea segment rose roughly 30% year over year to $246 million. Sales volumes increased roughly 14% year over year to 1,008,000 tons, driven by additional volume available from the Port Neal nitrogen complex. Average selling prices for granular urea rose 14% year over year to $244 per ton owing to a tighter global nitrogen supply and demand balance.
Sales at the UAN segment fell 6% year over year to $288 million. UAN sales volume dipped roughly 6% year over year to 1,920,000 in the quarter due to reduced export sales. Average selling prices were essentially flat year over year at $150 per ton.
Sales at the AN segment went up 34% year over year to $125 million. Sales volumes rose about 6% to 576,000 tons on increased demand for agricultural and industrial applications. Average selling prices increased 26% year over year to $217 per ton, owing to a tighter global nitrogen supply and demand balance and a new long-term AN supply agreement which started in 2017.
Financials
CF Industries’ cash and cash equivalents were $835 million at the end of 2017, down 28% year over year.
Long-term debt was $4,692 million, down around 19% year over year.
Outlook
Moving ahead, CF Industries expects higher energy costs in major producing regions, lower production in China, a weaker U.S. dollar, increased oil and freight costs and a steady global demand to support nitrogen prices during first-half 2018 at levels higher than the comparable period a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter. .
At this time, CF has a subpar Growth Score of D. However, its Momentum is doing a lot better with an A. The stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been 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 bBy). We expect an above average return from the stock in the next few months.
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CF Industries (CF) Down 4.7% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CF Industries Holdings, Inc. (CF - Free Report) . Shares have lost about 4.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is CF due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CF Industries' Q4 Earnings, Revenues Top Estimates
CF Industries swung to a profit in the fourth quarter of 2017, aided by a sizable tax benefit. The company logged a profit of $465 million or $1.98 per share in the reported quarter compared with a loss of $320 million or $1.38 per share a year ago. The company recorded a tax benefit of $491 million related to the U.S. Tax Cuts and Jobs Act in the reported quarter.
Barring one-time items, adjusted loss came in at 2 cents per share for the quarter, which was narrower than the Zacks Consensus Estimate of a loss of 11 cents.
Net sales increased roughly 27% year over year to $1,099 million in the quarter. It also beat the Zacks Consensus Estimate of $1,039 million. Sales were driven by increased volumes across most segments and higher selling prices across all segments.
FY17 Results
For 2017, profit was $358 million or $1.53 per share, compared with a loss of $277 million or $1.19 per share logged a year ago. Adjusted loss per share for the year was 25 cents.
Revenues for the full year rose 12% year over year to $4,130 million.
Segment Review
Net sales for the Ammonia segment climbed roughly 63% year over year to $344 million in the reported quarter. Ammonia sales volumes rose 58% year over year to 1,207,000 tons owing to additional production volumes from Donaldsonville and Port Neal complexes and higher demand for fall agricultural applications. Average selling prices rose 3% year over year to $285 per ton, aided by a tighter global nitrogen supply and demand balance.
Sales for the Granular Urea segment rose roughly 30% year over year to $246 million. Sales volumes increased roughly 14% year over year to 1,008,000 tons, driven by additional volume available from the Port Neal nitrogen complex. Average selling prices for granular urea rose 14% year over year to $244 per ton owing to a tighter global nitrogen supply and demand balance.
Sales at the UAN segment fell 6% year over year to $288 million. UAN sales volume dipped roughly 6% year over year to 1,920,000 in the quarter due to reduced export sales. Average selling prices were essentially flat year over year at $150 per ton.
Sales at the AN segment went up 34% year over year to $125 million. Sales volumes rose about 6% to 576,000 tons on increased demand for agricultural and industrial applications. Average selling prices increased 26% year over year to $217 per ton, owing to a tighter global nitrogen supply and demand balance and a new long-term AN supply agreement which started in 2017.
Financials
CF Industries’ cash and cash equivalents were $835 million at the end of 2017, down 28% year over year.
Long-term debt was $4,692 million, down around 19% year over year.
Outlook
Moving ahead, CF Industries expects higher energy costs in major producing regions, lower production in China, a weaker U.S. dollar, increased oil and freight costs and a steady global demand to support nitrogen prices during first-half 2018 at levels higher than the comparable period a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter. .
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. Price and Consensus | CF Industries Holdings, Inc. Quote
VGM Scores
At this time, CF has a subpar Growth Score of D. However, its Momentum is doing a lot better with an A. The stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been 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 bBy). We expect an above average return from the stock in the next few months.