CF Industries Holdings, Inc. CF recorded earnings of $4.35 per share in the fourth quarter of 2022, reflecting a rise of 33% from the year-ago quarter's $3.27. It surpassed the Zacks Consensus Estimate of $4.13.
The company’s net sales in the fourth quarter were $2,608 million, which lagged the Zacks Consensus Estimate of $2,814.2 million. Net sales increased 2.7% from $2,540 million reported in the prior-year quarter. The rise in top line was mainly attributable to an increase in prices across the company’s most segments due to disruption in the global supply chain of fertilizers, resulting from higher global energy costs, reduced operating rates globally and geopolitical factors.
CF Industries Holdings, Inc. Price, Consensus and EPS Surprise
CF Industries Holdings, Inc. price-consensus-eps-surprise-chart | CF Industries Holdings, Inc. Quote
Segment Highlights
Net sales in the Ammonia segment increased 3.3% year over year to $804 million in the reported quarter. Sales volume declined from the prior year’s levels in 2022. Average selling prices increased year over year on lower supply availability, lower operating rates and higher energy costs.
Sales in the Granular Urea segment declined 8.6% year over year to $605 million. Both average selling prices and sales volume increased in 2022. Sales volume climbed due to higher supply availability resulting from higher production, whereas the increase in selling prices was aided by lower supply availability, lower operating rates and higher energy costs.
Sales in the UAN segment climbed 15.4% year over year to $845 million. Both average selling prices and sales volume rose in 2022.
Sales in the AN segment rose 25.2% year over year to $189 million. Sales volumes were down year over year in 2022, while average selling prices increased on reduced supply.
FY22 Results
Earnings for full-year 2022 were $16.38 per share compared with $4.24 a year ago. Net sales climbed 71% to $11,186 million.
Financials
CF Industries’ cash and cash equivalents increased year over year to $2,323 million at the end of the year. Long-term debt was $2,965 million at the end of the year, down around 14%.
Net cash provided by operating activities was $3,855 million in the year, up roughly 34.2% year over year.
The company repurchased around 14.9 million shares during the year. Its board has authorized a new $3 billion share repurchase program, which will commence upon completion of the existing share repurchase program and run through the end of 2025.
Outlook
Moving ahead, CF industries expects global nitrogen prices to gain support from abundant agricultural demand. The company also expects the global nitrogen supply-demand balance to remain tight into 2025, supported by agricultural-led demand and persistently high energy prices in Europe and Asia. Demand for nitrogen continues to be driven by the need to replenish global grains stocks, per the company. CF believes that it will take at least two years for harvests to fully replenish global grain stocks, which will support strong grain plantings aiding nitrogen applications further.
Price Performance
Shares of CF Industries have gained 11.5% in the past year compared with a 2.6% rise of the industry.
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Zacks Rank & Key Picks
CF Industries currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks to consider in the basic materials space include Alpha Metallurgical Resources, Inc. AMR, ATI Inc. ATI and Nucor Corporation NUE. ATI and NUE currently sport a Zacks Rank #1 (Strong Buy), while AMR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alpha Metallurgical’s shares have gained 91.3% in the past year. The Zacks Consensus Estimate for AMR’s current-year earnings has been revised 1.7% upward in the past 60 days. The company has an earnings growth rate of 425% for the current year.
Alpha Metallurgical topped Zacks Consensus Estimate in two of the last four quarters. It delivered a trailing four-quarter earnings surprise of 1.1% on average.
ATI’s shares have gained 63% in the past year. The Zacks Consensus Estimate for ATI’s current-year earnings has been revised 2.8% upward in the past 60 days. The company has an earnings growth rate of 10.1% for the current year.
ATI topped Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.4% on average.
Nucor’s shares have gained 40.6% in the past year. The Zacks Consensus Estimate for NUE’s current-year earnings has been revised 13% upward in the past 60 days.
Nucor topped Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 7.7% on average.
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