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Earnings Preview: Expectations for CF’s Earnings in 1Q16

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EPS

CF Industries (CF), which is expected to report its 1Q16 earnings on May 4, 2016, has experienced a median earnings growth of -13.5% over the past 12 quarters. In this part, we’ll look at analysts’ expectations for the upcoming quarter’s earnings per share (or EPS).

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1Q16 EPS

CF Industries’ (CF) 1Q16 earnings are expected to show a steep YoY (year-over-year) decline by 58% to $0.41 per share, from $0.97 in 1Q15. Overall, for 2016, Wall Street analysts are estimating the company to report $2.40 in earnings per share, which will be a -38% decline from $3.88 per share in 2015. This would be by far the steepest decline in earnings over the past three years. CF Industries (CF) makes up 1.1% of the SPDR S&P North American Natural Resources ETF (NANR).

This is not surprising when we look at ammonia and urea prices in the recent months, which are sitting at the bottom compared to their historical five-year prices.

Expectations for peers

For fiscal 2016, CVR Partners (UAN) is expected to report EPS of $0.22 per share, or a 47% decline in EPS year-over-year. The Mosaic Company (MOS) is expected to report EPS of $1.46 in 2016, which is a 50% decline from 2015. Intrepid Potash (IPI) is expected to report EPS of -$0.50 in 2016, a decline of 63% year-over-year.

Let’s look at short interest next, which tells us about the investors’ sentiment on the company as it gets ready to report its earnings.

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