Fertilizer producer CF Industries Holdings, Inc. (CF: Quote) said Monday after the markets closed that its second quarter profit rose 24%, helped by robust nitrogen demand and low natural gas prices as well as a mark-to-market gain on natural gas derivatives.
However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations as did its quarterly sales.
"A very favorable industry environment and excellent execution enabled us to realize the highest EBITDA, earnings and earnings per share for any quarter," said Stephen Wilson, chairman and chief executive officer, CF Industries Holdings.
Looking forward, CF Industries said the impact of dry weather across the United States and a number of other growing regions has diminished projected crop yields for the current growing season, increased crop prices and created expectations for high planted acreage again in 2013.
The company expects robust fall ammonia demand as the North American supply chain restocks to support the high planted acreage anticipated next year.
The company expects the export market for phosphates to continue to offer more attractive selling opportunities than the domestic market due to strong demand in Latin America and India.
CF Industries shares are gaining 2.23% in after hours trading after closing the day's regular trading session at $203.46, up $1.44. The shares trade in a 52-week range of $115.34 to $208.43.
The Deerfiled, Illinois-based company reported net income for the second quarter of $606.3 million or $9.31 per share, compared to $487.4 million or $6.75 per share for the year-ago quarter.
The latest quarter results include a $77.6 million non-cash pre-tax mark-to-market gain on natural gas derivatives and $15.2 million of accelerated amortization of capitalized financing fees related to the termination of a prior credit facility. The mark-to-market gain increased after-tax earnings per share by $0.74 and the accelerated amortization reduced after-tax earnings per share by $0.14.
The company said share repurchases during the 2012 second quarter decreased weighted-average shares outstanding by 2%, increasing after-tax earnings per share by $0.19.
On average, 14 analysts polled by Thomson Reuters expected the company to earn $8.90 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the second quarter fell 4% to $1.74 billion from $1.80 billion in the same quarter last year, mainly due to lower volumes and phosphate product prices. Ten analysts had a consensus revenue estimate of $1.95 billion for the second quarter.
The company said total sales volume for the second quarter decreased to 4.0 million tons from 4.3 million tons a year earlier, largely due to the early application season, which pulled some spring demand into the first quarter.
Lower phosphate product prices resulted from lower global demand, while higher nitrogen product prices reflected strong spring demand and tight inventory levels throughout the North American distribution chain, the company noted.
Nitrogen net sales in the second quarter remained flat with last year at $1.5 billion, as higher selling prices were offset by lower volumes.
Phosphate net sales for the quarter fell 22% to $231.5 million from $296.6 million a year ago.
During the second quarter, CF Industries repurchased 3.1 million shares of its common stock for $500 million, completing the $1.5 billion share repurchase program approved by the company's board of directors in August 2011.
The company said its Board of Directors has authorized the expenditure of up to $3.0 billion to purchase shares of the company's common stock through December 31, 2016.
| || |
| To receive FREE breaking news email alerts for CF Industries Holdings Inc. and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com