Shares of CVR Partners, LPUAN touched a 52-week low of $8.20 yesterday, before eventually closing marginally higher at $8.45.
The company's shares have tumbled around 17% in the past one month. Also, the stock has lost roughly 27% so far this year.
Factors to Consider
CVR Partners reported a loss in third-quarter 2015 on a double-digit decline in revenues. Results were impacted by expenses and production losses associated with a major plant turnaround during the quarter, unplanned outages at Linde LLC's air separation unit and costs related to CVR Partners' proposed acquisition of Rentech Nitrogen Partners, L.P RNF .
The company logged a net loss of $13.5 million or 18 cents per share in the third quarter against a profit of $12.7 million or 17 cents per share a year ago. CVR Partners posted revenues of $49.3 million, down around 26% year over year, impacted by lower production volumes and pricing.
CVR Partners is exposed to pricing pressure stemming from lower nitrogen fertilizer prices. It is seeing lower prices for UAN, as reflected by a roughly 11% decline in the last quarter. Urea prices have been under pressure due to higher supply from Chinese producers.
The company's operations are also subject to the risks of production outages due to plant shutdowns. It witnessed a major three-week plant turnaround during the third quarter of 2015, involving expenses of roughly $7 million. This downtime is expected to impact CVR Partners' full-year 2015 distribution. Additionally, the company has a major plant turnaround for Coffeyville, scheduled for the second half of 2017. A prolonged plant shutdown, if any, could have an adverse impact on its results of operations and financial condition.
CVR Partners is also facing intense pricing competition from other fertilizer producers. Lower cost of natural gas, which is used as primary feedstock by most of its competitors, unfavorably impacts CVR Partners' competitive position vis-à-vis other nitrogen fertilizer makers.
CVR Partners currently carries a Zacks Rank #3 (Hold).
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