雅虎香港財經 Nutrien (NTR) Down 4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Nutrien (NTR). Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutrien due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Nutrien's Q1 Earnings and Revenues Surpass Estimates
Nutrien recorded profits of $165 million or 32 cents per share in first-quarter 2024, down from $576 million or $1.14 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 46 cents. The bottom line beat the Zacks Consensus Estimate of 36 cents.
Sales fell around 12% year over year to $5,389 million in the quarter. Nevertheless, the figure beat the Zacks Consensus Estimate of $5,375.6 million.
A decline in net fertilizer selling prices negatively impacted the company's financial results. This was somewhat balanced by increased earnings in the Retail division, higher sales volumes for fertilizers and reduced natural gas costs.
Segment Highlights
Sales in the Nutrien Ag Solutions (Retail) segment declined 3% year over year to $3,308 million in the quarter. The downside was primarily due to lower selling prices. The figure was higher than our estimate of $2,953.6 million.
The Potash division’s sales declined 19% year over year to $813 million, below our estimate of $901.9 million. North American sales volumes rose in the quarter compared with the same period in 2023, thanks to lower channel inventory and more typical purchasing behavior. Offshore sales volumes also saw a boost due to heightened demand in key international markets. Despite this, the net selling price per ton declined due to a fall in benchmark prices compared with robust prices in the first quarter of 2023. On the bright side, the cost of goods sold per tonne dropped, mainly owing to increased production volumes and reduced royalties.
Sales in the Nitrogen segment were $911 million, down around 31% year over year. In the reported quarter, sales volumes increased mainly because of higher production of urea and UAN, along with robust fertilizer demand. However, the upside was somewhat tempered by a decline in ammonia sales as the company optimized its product mix. The net selling price per ton for major nitrogen products dropped, influenced by weaker benchmark prices linked to lower energy costs in key nitrogen-producing regions. The reported figure was lower than our estimate of $1,210.5 million.
Sales in the Phosphate segment were $437 million, down around 15% year over year. The figure was higher than our estimate of $420.6 million. In the first quarter of 2024, sales volumes rose, driven by higher production and strong demand across fertilizer, industrial, and feed products. However, the net selling price per ton decreased, mainly due to a drop in fertilizer benchmark prices and lower prices in industrial and feed products. This reflects the usual delay in price realizations relative to benchmark trends.
Financials
At the end of the quarter, the company had cash and cash equivalents of $496 million, down around 66% year over year. Long-term debt was $8,910 million, down nearly 6.3% year over year.
Cash used by operating activities was $487 million in the reported quarter.
Guidance
The Retail adjusted EBITDA guidance, set between $1.65 billion and $1.85 billion, reflects the company's forecast for increased crop nutrient sales volumes and profit margins in its North American operations during the first half of 2024, as well as improved crop input margins in Brazil during the second half of the year. This guidance also incorporates a full year of earnings from the company's Retail assets in Argentina, Chile and Uruguay.
For potash, the company's sales volume guidance, estimated between 13 and 13.8 million tons, assumes a more balanced distribution of volumes between the first and second halves compared to the prior year. The nitrogen sales volume guidance, ranging from 10.6 to 11.2 million tons, is based on higher operating rates at the company's North American and Trinidad plants, along with increased sales of upgraded products like urea and nitrogen solutions. Phosphate sales volume guidance, ranging from 2.6-2.8 million tons, anticipates higher operating rates compared with the 2023 tally.
Total capital expenditures of $2.2-$2.3 billion are projected to be lower than the prior year’s figure, including investments in Retail, Potash mine automation projects and Nitrogen expansions.
The guidance for the effective tax rate on adjusted earnings has been lowered to a range of 23-25%, mainly due to a projected change in the geographic mix of earnings.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Nutrien has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nutrien has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutrien belongs to the Zacks Fertilizers industry. Another stock from the same industry, CF Industries (CF), has gained 4.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
CF reported revenues of $1.47 billion in the last reported quarter, representing a year-over-year change of -26.9%. EPS of $1.03 for the same period compares with $2.85 a year ago.
CF is expected to post earnings of $1.92 per share for the current quarter, representing a year-over-year change of -28.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.2%.
CF has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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