CF Industries Holdings Inc., the largest U.S. maker of nitrogen fertilizer, reported first-quarter profit that exceeded analysts’ estimates as some nutrient prices rose on projections for increased corn planting.
Net income climbed to $406.5 million, or $6.47 a share, from $368.4 million, or $5.54, a year earlier, the Deerfield, Illinois-based company said today in a statement. Profit excluding an accounting gain and other one-time items was $6.03 a share, topping the $6 average of 14 estimates compiled by Bloomberg. Sales declined 13 percent to $1.34 billion, missing the $1.44 billion average estimate.
“Except for urea, all nitrogen product prices increased from the prior year period due to anticipated strong demand associated with expectations for a high number of corn acres to be planted in North America,” the company said in the statement. “Average selling prices for urea decreased due to high imports into North America.”
Corn futures in Chicago were on average 11 percent higher in the first quarter compared with a year earlier, generating more cash for farmers to buy fertilizer, after the worst U.S. drought in 70 years ravaged crops last year. That may help support prices for crop nutrients, which have been falling sequentially, said Jason Miner, a Princeton, New Jersey-based analyst at Bloomberg Industries.
“What we’re seeing here is that resilient corn prices are supporting a wide range of nitrogen fertilizers,” Miner said today in a telephone interview. “All eyes are on this Friday’s U.S. crop report and whether that provides further support for these crop and fertilizer prices.”
The results were released after the close of regular trading in New York, where CF rose 1.3 percent to $192.86 at 5 p.m.
The company’s adjusted per-share earnings have beaten average analysts’ estimates in eight of the past nine quarters.
(CF Industries scheduled a conference call for tomorrow at 10 a.m. New York time at +1-877-280-4959 or +1-857-244-7316. The passcode is 97243513.)