CF Industries (CF) to Report Q3 Earnings: What's in Store?
CF Industries Holdings, Inc. CF is set to release third-quarter 2022 results on Nov 2, after the closing bell.
CF Industries beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missed once and delivered in-line result on the other occasion. The company has a trailing four-quarter earnings surprise of 2.5%, on average.
The company’s third-quarter performance will likely reflect the benefits of higher nitrogen prices and increased demand. However, high natural gas costs are likely to have affected margins in the quarter.
Shares of CF Industries have rallied 83.5% in the past year compared with a 27.4% rise of the industry.
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Zacks Model
Our proven model predicts 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.
Earnings ESP: Earnings ESP for CF Industries is +1.14%. The Zacks Consensus Estimate for third-quarter earnings is currently pegged at $3.19. 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.
What Do the Estimates Indicate?
The Zacks Consensus Estimate for CF Industries' third-quarter total sales is currently pegged at $2,304 million, which indicates a 69.2% increase year over year.
The Zacks Consensus Estimate for total sales in the Ammonia segment is currently pegged at $752 million, calling for a 118.6% rise on a year-over-year basis. The same for the Granular Urea segment is $519 million, which suggests an increase of 34.5% year over year.
The consensus mark for sales of the Urea Ammonium Nitrate Solution segment is currently pegged at $662 million, which suggests an increase of 69.7% year over year.
The Zacks Consensus Estimate for total sales of the Ammonium Nitrate segment is currently pegged at $187 million, which indicates an increase of 58.5% year over year.
Factors at Play in Q3
CF Industries is likely to have benefited from higher nitrogen fertilizer demand in major markets in the third quarter. Global nitrogen demand is expected to have remained strong, driven by high crop commodity prices. Industrial demand recovered from the pandemic-related disruptions.
Strong nitrogen demand driven by higher commodity prices and higher nitrogen prices is likely to have aided the company’s sales and margins in the September quarter. Nitrogen prices are likely to have been driven by lower supply resulting from reduced operating rates globally due to higher energy prices.
However, higher natural gas costs, partly stemming from increased in natural gas costs in Europe, are likely to have increased the cost of sales and impacted the company’s margins in the third quarter.
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 these too have the right combination of elements to post an earnings beat this quarter:
Albemarle Corporation ALB, scheduled to release earnings on Nov 2, has an Earnings ESP of +3.64% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Albemarle’s third-quarter earnings has been revised 1% upward in the past 60 days. The Zacks Consensus Estimate for ALB’s earnings for the quarter is pegged at $6.84.
Koppers Holdings Inc. KOP, slated to release earnings on Nov 4, has an Earnings ESP of +2.28% and carries a Zacks Rank #2.
The Zacks Consensus Estimate for Koppers’ third-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for KOP’s earnings for the quarter is currently pegged at $1.17.
ATI Inc. ATI, scheduled to release earnings on Nov 2, has an Earnings ESP of +1.15%.
The Zacks Consensus Estimate for ATI's earnings for the third quarter is currently pegged at 52 cents. ATI currently carries a Zacks Rank #3.
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