uploads///Q Earnings Per Share and Growth

What to Expect from Fertilizer Companies’ Earnings in 2Q17


Aug. 18 2020, Updated 6:22 a.m. ET

Earnings growth

In recent quarters, fertilizer companies have experienced earnings growth deceleration due to unsupportive prices pressured by excess production capacity. Given the desperation to preserve market share and margins, some companies have even announced mergers. The industry continues to consolidate, but the direction of fertilizer prices doesn’t appear positive. Amid these conditions, let’s look at analysts’ estimates for upcoming quarterly earnings.


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Weakness in growth

The outlook on earnings growth is mixed for the above seven companies with four expected to report negative earnings growth year-over-year. Note that these are adjusted to exclude one-time charges. 

CVR Partners (UAN) is expected to report EPS (earnings per share) of $0.01, which will be 87% lower year-over-year. CF Industries (CF) is expected to report EPS of $0.07, a decline of 80% year-over-year. Both these companies are heavily exposed to nitrogen fertilizers and are facing pressures from nitrogen imports to North America (MOO).

Israel Chemicals (ICL) is expected to report EPS of $0.09 per share in its upcoming 2Q17, which will be a 15% fall year-over-year, while Agrium (AGU) is expected to report EPS of $4.11, which will be 1.7% lower year-over-year.

In the positive

On the other hand, three companies will likely report earnings growth. Mosaic (MOS) is expected to report EPS of $0.26 per share, or growth of 336% year-over-year. Intrepid Potash (IPI) is expected to follow this lead with growth of 70% on EPS of -$0.05 in 2Q17. Though Intrepid Potash is expected to report negative earnings, it reported much worse EPS a year ago. PotashCorp (POT) is expected to report EPS growth of 5.7% in 2Q17 on EPS of $0.19 per share. 

Next, we’ll discuss analysts’ price targets and the earnings calendar for the above companies.


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