Nutrien's (NTR) Q4 Earnings Miss, Revenues Beat Estimates

Nutrien Ltd. NTR recorded fourth-quarter 2023 profits of $176 million or 35 cents per share, down from $1,118 million or $2.15 in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 37 cents. The bottom line missed the Zacks Consensus Estimate of 72 cents.

Sales plunged around 25% year over year to $5,664 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,243.1 million.

The company's financial performance was impacted by lower net realized selling prices across all business segments and lower earnings from the Retail unit.

Nutrien Ltd. Price, Consensus and EPS Surprise

 

Nutrien Ltd. Price, Consensus and EPS Surprise

Nutrien Ltd. price-consensus-eps-surprise-chart | Nutrien Ltd. Quote

 

Segment Highlights

Sales in the Nutrien Ag Solutions (Retail) segment declined 14% year over year to $3,502 million in the quarter. The decline in the fourth quarter was primarily due to lower selling prices across all regions compared with the strong periods in 2022. The figure was higher than our estimate of $2,667.4 million.

Potash division’s sales declined 44% year over year to $776 million, higher than our estimate of $649.7 million. North American sales volumes rose in the fourth quarter due to lower channel inventory and increased grower demand, while offshore sales saw growth driven by Brazil and China. Despite higher volumes, net selling prices dropped in the quarter due to lower benchmark prices and higher costs due to logistical issues at Canpotex’s West Coast port facilities.

Sales in the Nitrogen segment were $877 million, down around 45% year over year. The fourth-quarter downside stemmed from reduced net realized selling prices across all major nitrogen products. Sales volumes increased during the same period primarily due to elevated UAN production and sales. However, this upside was partially offset by lower ammonia availability, mainly due to production outages at plants in Trinidad. The reported figure was lower than our estimate of $1,197.3 million.

Sales in the Phosphate segment were $472 million, up around 10% year over year. The figure was higher than our estimate of $393.1 million.Fourth-quarter sales volumes rose on the back of heightened demand for phosphate fertilizer, while production saw an uptick owing to enhanced reliability at the Aurora plant. During the same period, the net realized selling price declined primarily due to lower fertilizer net realized selling prices and reduced industrial and feed net realized selling prices. These declines reflect the typical lag in price realizations relative to spot fertilizer prices.

Financials

At the end of the quarter, Nutrien had cash and cash equivalents of $941 million, up around 4% year over year. Long-term debt was $8,913 million, up nearly 11% year over year.

Cash provided by operating activities was $4,150 million in the reported quarter.

FY23 Results

In 2023, Nutrien reported net earnings of $1.3 billion or $2.53 earnings per share compared with $14.18 a year ago. Adjusted earnings per share stood at $4.44 compared with $13.19 a year ago. The company recorded total sales of $29 billion for the year (down 23% year over year), with adjusted EBITDA reaching $6.1 billion.

Guidance

Nutrien projects a Retail adjusted EBITDA ranging from $1.65-$1.85 billion for 2024, anticipating increased gross margins across major product lines compared with 2023 levels. The company expects crop nutrient gross margins to benefit from higher sales volumes and per-ton margins, particularly rebounding from compressed levels in the prior year's first half, with an anticipated recovery in Brazilian crop protection margins in the latter half of 2024.

Potash sales volume guidance ranges from 13-13.8 million tons, reflecting anticipated demand growth in offshore markets and normalized Canpotex port operations. In North America, first-quarter sales volumes are expected to rise from the prior year’s levels due to robust customer engagement.

Nitrogen and phosphate sales volume guidance, ranging from 10.6-11.2 million tons and 2.6-2.8 million tons, respectively, anticipates higher operating rates compared to 2023.

Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.

Price Performance

Nutrien’s shares have lost 35% in the past year compared with a 34.7% decline of the industry.

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Zacks Rank & Key Picks

Nutrien currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation EGO and Hawkins, Inc. HWKN, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 33.7% in the past year.

Eldorado has a projected earnings growth rate of 1,040% for the current year. The Zacks Consensus Estimate for EGO’s current-year earnings has been revised upward by 10% in the past 60 days. EGO topped the consensus estimate in each of the last four quarters, with the average earnings surprise being 496%. The company’s shares have rallied 34.7% in the past year.

The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied 67.7% in the past year.

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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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