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CF Industries Sells Joint Venture Stake to Keytrade Principals - Analyst Blog

CF Industries Holdings, Inc.CF announced that principals of Zurich, Switzerland-based Keytrade AG, a global fertilizer trading company, have purchased the former's interest in the joint venture. CF Industries held a 50% stake in Keytrade prior to this transaction.

As a part of the joint venture, Keytrade Industries was unable to engage in the nitrogen-related business in North America. As a result, the principals of Keytrade decided to buy all of CF Industries' interest in the joint venture so that Keytrade can pursue its independent business plan.

Though Keytrade and CF Industries both benefited from their partnership, Keytrade believes with the changing global supply scene in it necessary for it to establish itself as a private company and gather the flexibility to pursue growth opportunities.

CF Industries saw a 67.5% fall in its net earnings for first-quarter 2015 to $230.6 million or $4.79 per share from $708.5 million or $12.90 per share a year ago. However, adjusted earnings (excluding one-time items) of $4.83 per share topped the Zacks Consensus Estimate of $4.61.

Sales slipped 15.8% year over year to $953.6 million in the quarter and missed the Zacks Consensus Estimate of $965 million. Sales declined mainly due to lower sales volumes in ammonia and urea ammonium nitrate solution (UAN) and lower average prices in the granular urea, UAN and other segments, which more than offset higher average price for ammonia and higher granular urea sales volumes.

CF Industries expects to deliver a strong performance in the second quarter compared with overall market conditions. The company anticipates robust nitrogen demand for 2015 based on expectations of over 89 million acres of corn to be planted in 2015 and strong industrial demand.

CF Industries currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the basic materials sector include CVR Partners, LP UAN , Intrepid Potash, Inc. IPI , and LyondellBasell Industries N.V. LYB . All these stocks sport a Zacks Rank #1 (Strong Buy).

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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.


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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