CF Industries Holdings Ltd., the largest U.S. producer of nitrogen-based fertilizers, dropped the most in five months on speculation the company’s quarterly earnings may be at a peak.
CF fell 6.9 percent to $183.91 at the close in New York, the biggest percentage decline since Nov. 17.
The company yesterday after the close of regular trading that first-quarter profit excluding a mark-to-market loss on gas derivatives was $6.06 a share, topping the $4.95 average of 14 estimates compiled by Bloomberg. Adjusted profit will be $7.69 in the second quarter and $5.05 in the third quarter, according to estimates.
Factory outages, delayed imports and early crop planting have helped to drive nitrogen-fertilizer prices higher, Charles Neivert, a New York-based analyst at Dahlman Rose & Co. who recommends holding the stock, said today in a note to clients. Those market conditions “will be hard to exceed or even replicate in the near future.”
The current quarter may “may represent a peak for earnings for CF in this cycle,” he said.
U.S. farmers are expected to increase corn sowing by 4.3 percent to 95.864 million acres this year, the most since 1937, the Department of Agriculture said on March 30, after surveying growers. About 53 percent of the U.S. corn crop was planted as of April 29, compared with an average of 27 percent in the past five years, the USDA said April 30 in a report.