CF Industries (CF) to Release Fourth Quarter Results: What’s in Store?

CF Industries Holdings, Inc. CF is expected to release its fourth quarter 2021 results on February 15, after the closing bell.

The company’s performance in the fourth quarter should reflect the benefits of higher nitrogen prices and increased demand. However, high natural gas costs are likely to have affected margins in the quarter ahead.

CF Industries has beaten Zacks’ consensus estimate for earnings in two of the past four quarters while missing the same twice. The company has an earnings surprise for the last four quarters of 97.8% on average. The company announced a negative earnings surprise of 1.03% in the last quarter.

Shares of CF Industries have gained 69.2% over the past year, versus the industry’s 24.7% rise.

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Let’s see how things went for this announcement.

Zacks model

Our proven model conclusively predicts increased profits for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings.

ESP Earnings: The ESP profit for CF Industries is +7.88%. The Zacks consensus estimate is currently pegged at $3.41. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Zack’s Ranking: CF Industries currently wears a #3 Zacks rank.

What do the estimates indicate?

Zacks’ consensus estimate for total CF Industries fourth-quarter sales is currently pegged at $2.625 million, indicating a 138.2% year-over-year increase.

Zacks’ consensus estimate for total sales in the ammonia segment is currently pegged at $621 million, implying a 108.4% year-over-year increase. The same for the granular urea segment is $733 million, suggesting a 120.1% year-over-year increase.

The consensus sales mark for the ammonium nitrate and urea solutions segment is currently pegged at $773 million, suggesting a 184.2% year-over-year increase.

Zacks’ consensus estimate for total Ammonium Nitrate segment sales is currently pegged at $137 million, indicating a 22.3% year-over-year increase.

Factors at play in the fourth quarter

CF Industries should have benefited from higher demand for nitrogen fertilizers in major markets in the fourth quarter. Global nitrogen demand is expected to remain strong, driven by high agricultural commodity prices. Industrial demand has recovered from the pandemic-related disruptions. Greater economic activities likely contributed to higher industrial consumption of nitrogen products.

Strong nitrogen demand driven by higher commodity crop futures and higher nitrogen prices likely supported the company’s margins in the fourth quarter. Nitrogen prices were likely influenced by lower global supply availability resulting from reduced exploitation rates in Europe and Asia.

The company also likely benefited from continued strong demand for urea imports from Brazil and India. Rising crop prices, increased corn acreage and improving farm economics supported demand in Brazil.

Rising natural gas costs, due in part to an increase in UK natural gas costs, likely increased the cost of sales and impacted the company’s margins in the fourth quarter.

CF Industries Holdings, Inc. Price and EPS Surprise

CF Industries Holdings, Inc. Price and EPS Surprise

CF Industries Holdings, Inc. price-eps-surprise | Quote from CF Industries Holdings, Inc.

Actions worth a look

Here are a few companies in the Basic Materials sector that you might want to consider, as our model shows they have the right combination of elements to post higher earnings this quarter:

The Mosaic Company MOS, which is slated for earnings release Feb. 22, has an ESP on earnings of +1.80% and carries a Zacks rank of No. 2. You can see the full list of today’s Zacks #1 Rank stocks here.

Zacks’ consensus estimate for Mosaic’s fourth-quarter earnings has been revised up 10.4% over the past 60 days. MOS’ consensus earnings estimate for the quarter is currently set at $1.95.

Hunter’s Society HUN, which is slated to report earnings on Feb. 15, has an earnings ESP of +0.09% and carries a Zacks rank of No. 2.

Huntsman’s consensus fourth-quarter earnings estimate has been revised up about 1% in the past 60 days. The Zacks consensus estimate for HUN’s quarterly earnings is pegged at 88 cents.

Nutrien Ltd. NTR, which is slated for earnings release Feb. 16, has an earnings ESP of +2.61% and sports a No. 1 Zacks rank.

The Zacks consensus estimate for Nutrien’s fourth-quarter earnings has been revised up 17.4% over the past 60 days. NTR’s consensus earnings estimate for the quarter is currently pegged at $2.30.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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