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Why CF Industries’ Sales Rose in 1Q17

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Sales growth

For 1Q17, CF Industries’ (CF) sales rose 3% year-over-year to $1.04 billion from $1.0 billion in 1Q16. The company stated that in 1Q17, it had the “highest sales volume for any quarter in the company’s history.”

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Segment performance

CF Industries reports sales under five segments. For 1Q17, the ammonia segment contributed 45% to the company’s sales growth. The segment’s sales rose 6% year-over-year (or YoY) to $282 million. This segment accounted for about 27% of the company’s sales during the quarter.

The UAN segment contributed 24% to the company’s 1Q17 sales growth with 3% YoY growth to $317 million. This segment accounted for 31% of the company’s total sales during the quarter. The company’s other segment contributed 21% to its 1Q17 sales growth. The segment’s sales rose faster than all other segments’ sales. The segment posted 10% year-over-year sales growth to $75 million.

Granular urea contributed 9% to the company’s 1Q17 sales growth, while the AN segment’s contribution to its sales growth during the quarter was flat. Granular urea rose 1% year-over-year to $238 million, while the AN segment sales remained unchanged at $125 million YoY.

Sales drivers

Sales for fertilizer companies (XLB) such as CF, PotashCorp (POT), Agrium (AGU), and Intrepid Potash (IPI) are a function of shipment volume and commodity prices. Read Agricultural Fertilizer Industry: Your Comprehensive Overview to learn more about agribusiness drivers.

In the next part, we’ll discuss CF Industries’ shipments.

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