CF Industries beats quarterly profit estimates on higher ammonia production
Aug 7 (Reuters) -Fertilizer maker CF Industries CF.N beat second-quarter profit estimates on Wednesday as a rise in ammonia production and higher nitrogen prices offset lower sale volumes and pricing, sending the company's shares up 3% in aftermarket trading.
Despite a pullback in global crop prices following improvements in supply, U.S. corn and soybean production is expected to remain elevated this year, amid favorable weather conditions, benefiting fertilizer manufacturers.
Additionally, Brazil's soybean crop for the 2024/25 season could exceed last season's planting area, consultancy firm Safras & Mercado said in July.
CF Industries uses natural gas as a feedstock and fuel for producing nitrogen fertilizers.
Its ammonia production was 2.6 million tons in the reported quarter, compared to 2.4 million tons in the year-ago quarter. It expects gross ammonia production for the full-year 2024 to be approximately 9.8 million tons.
Net sales were $1.57 billion, above analysts' estimate of $1.53 billion.
Nitrogen prices have been supported due to gas curtailments in Egypt and Trinidad, along with scheduled outages during a time that typically sees lower prices and low global shipments, the company said.
Additionally, U.S. natural gas NGc1 prices have declined about 9.2% so far this year, helping ease costs.
Rival Yara YAR.OL reported profit above estimates in July.
However, average selling prices for CF Industries decreased as lower energy costs worldwide reduced the market-clearing price required to meet global demand.
Its sales volumes for ammonia, urea ammonium nitrate solution and ammonium nitrate in the second quarter were also lower than the year-ago period.
The Northbrook, Illinois-based company reported net earnings of $2.30 per share, higher than the estimate of $1.84 per share, according to LSEG data.
Reporting by Seher Dareen and Sourasis Bose in Bengaluru; Editing by Pooja Desai
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