CF Industries Holdings’ (CF) stock rose by almost 8.4% on February 18, 2016, the day after the company’s 4Q15 earnings release. The company reported adjusted EPS (earnings per share) of $0.76, which missed analyst estimates of $0.81 per share. These adjustments include the following:
- $98 million in unrealized losses due to natural gas hedges
- $68 million in impairment charges arising out of the joint venture investments in PLNL (Point Lisas Nitrogen Limited)
- $20 million in transaction costs for the OCI acquisition
- $15 million costs for expansion at Port Neal and Donaldsonville facilities
- $3 million loss in currency hedges
Without these one-time adjustments, the company’s EPS was $0.11 during the quarter.
CF Industries’ stock has been on a downward trajectory since 2015, which is plotted against the quarterly earnings per share in the chart above. YTD (year-to-date) as of February 18, the company was still down, returning -15.7% while the Materials Select Sector SPDR Fund (XLB), which has 12.7% of its portfolio in agricultural chemicals, was also down as of that date, having returned a -5% YTD.
The picture is no different for agricultural fertilizer companies such as Potash Corporation (POT) and CVR Partners (UAN), both returning -6.4% and -19% YTD as of February 19. Intrepid Potash (IPI) was down by 30% YTD.
In this earnings analysis series, we’ll explore CF Industries’ key performance metrics in 4Q15. We’ll also examine the key drivers of the company’s quarterly performance and read into the management’s outlook and guidance for upcoming quarters.
Let’s begin with CF Industries revenue in 4Q15.