CF Industries misses quarterly profit estimates on higher costs; shares fall

Audio By Carbonatix

Enlarge

(Reuters) -CF Industries missed estimates for second-quarter profit on Wednesday, as higher costs weighed on the fertilizer firm, sending its shares down 4.3% in extended trading.

The company’s quarterly cost of sales was up about 27% at $1.14 billion from a year earlier on higher natural gas costs, which were up 77% at $3.36 per million British thermal units.

U.S. natural gas prices, a key feedstock for nitrogen fertilizers, rose in the second quarter as power demand spiked on the back of energy-hungry data centers, escalating production costs for fertilizer producers.

The Northbrook, Illinois-based company reported an adjusted profit of $2.35 per share for the three months ended June 30, compared with the analysts’ average estimate of $2.54, according to data compiled by LSEG.

Crop prices — including those of soybean, wheat and corn — have been falling in recent quarters due to oversupply and weakening demand, forcing farmers to cut back spending on fertilizers, affecting companies such as CF Industries.

Peer Mosaic also missed second-quarter profit estimates on Tuesday, as higher costs weighed against gains from stronger potash prices and robust sales in Brazil.  

CF Industries’ quarterly net earnings attributable to common stockholders fell about 8% to $386 million from a year earlier.

The results come at a time when the agrichemical industry is bracing itself for a potential fallout from U.S. President Donald Trump’s sweeping tariffs on most imports, which are expected to lower demand and curb farmers’ spending.

(Reporting by Sumit Saha and Katha Kalia in Bengaluru; Editing by Alan Barona)