CF Industries (CF) to Post Q2 Earnings: What's in Store?

·3 min read

CF Industries Holdings, Inc. CF is set to release second-quarter 2021 results on Aug 9, after the closing bell.

The company’s second-quarter performance is likely to reflect the benefits of higher nitrogen prices and increased demand. However, high natural gas costs are likely to have affected margins in the to-be-reported quarter.

Shares of CF Industries have gained 43.5% in the past year compared with 55.8% rise of the industry.

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Let’s see how things are shaping up for this announcement.

Factors at Play in Q2

Strong nitrogen demand driven by higher commodity crop futures prices as well as higher nitrogen prices aided by lower global supply availability and increased energy prices in Asia and Europe are likely to have aided the company’s margins in the second quarter. Nitrogen demand is also expected to have been supported by higher Canola plantings in Canada. Demand for nitrogen is also expected to have been higher in North America for industrial uses.

The company is also likely to have gained from continued strong demand for urea imports from Brazil and India. Lack of active domestic urea production and improved farm economics are supporting demand in Brazil.

However, higher natural gas costs are likely to have increased cost of sales and impacted the company’s margins in the second quarter.

What do the Estimates Indicate?

The Zacks Consensus Estimate for CF Industries' second-quarter total sales is currently pegged at $1,719 million, which calls for 42.8% increase year over year.

The Zacks Consensus Estimate for total sales in the Ammonia segment is currently pegged at $541 million, calling for a 48.6% rise on a year-over-year basis. The same for the Granular Urea segment is at $487 million, which suggests an increase of 48% year over year.

The consensus mark for sales in the urea ammonium nitrate solution segment is currently pegged at $440 million, which suggests an increase of 42.9% year over year.

The Zacks Consensus Estimate for total sales in the ammonium nitrate segment is currently pegged at $164 million, which indicates an increase of 38.9% year over year.

Zacks Model

Our proven model does not predict an earnings beat for CF Industries this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for CF Industries is -9.04%. The Zacks Consensus Estimate is currently pegged at $1.64. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CF Industries currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries Holdings, Inc. Price and EPS Surprise

CF Industries Holdings, Inc. Price and EPS Surprise
CF Industries Holdings, Inc. Price and EPS Surprise

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

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this time around.

Nutrien Ltd. NTR, scheduled to release earnings on Aug 9, has an Earnings ESP of +1.44% and a Zacks Rank #1.

GrowGeneration Corp. GRWG, scheduled to release earnings on Aug 12, has an Earnings ESP of +3.45% and carries a Zacks Rank #2.

Sociedad QuImica y Minera de Chile S.A. SQM, scheduled to release earnings on Aug 18, has an Earnings ESP of +21.88% and carries a Zacks Rank #2.


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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report

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