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Why CF Industries Has Taken a Beating in 2015

Adam Jones - Author

Aug. 18 2020, Updated 5:14 a.m. ET

A dull year for CF Industries

CF industries (CF) has had a dull year so far with YTD (year-to-date) returns of -17.2%. The bumper crop season in 2014, which led to a decline in crop prices, impacted the farm economy this year.

As a result, other companies such as Potash Corporation (POT), Mosaic (MOS), and Intrepid Potash (IPI) also suffered. The VanEck Vectors Agribusiness ETF (MOO) was also down 7.3% YTD.

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Share price drop

The most recent drop in CF’s share price came after the company reported its 3Q15 earnings on November 5, 2015. The company’s shares declined by as much as 10%. This was primarily due to the company’s EPS (earnings per share) of $0.49, which missed the analysts’ estimates of $0.74, or -33.7%.

CF Industries sold off its phosphate business division to Mosaic in the first quarter of 2014. It also has 50% interest in distinct joint ventures located in the United Kingdom and Trinidad and Tobago. During 2Q15, CF Industries acquired the remaining 50% of GrowHow, a UK venture. As a result, the company has become a nitrogen pure play company.

Series overview

In this series, we will discuss the most recent developments in CF Industries (CF). We’ll discuss how the company was impacted by realized prices and some of the factors pressuring the company’s shipments.

We will also discuss the company’s cash management and debt positions. Toward the end of the series, we will look at CF Industries’ valuation multiple EV/EBITDA and how it has trended over the years. We will compare CF’s valuation multiple with that of its peers.


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