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Why CF Industries’ Sales Grew 28% in 3Q17

Adam Jones - Author

Nov. 6 2017, Updated 4:30 p.m. ET

CF’s sales rise

In 3Q17, CF Industries (CF) sales saw growth across each of its five segments year-over-year. Overall, the company’s sales grew 28% year-over-year to $870 million from $680 million in 3Q16.

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Performance by segment

Out of the five segments in the above chart, the UAN (Urea Ammonium Nitrate) segment saw the steepest growth year-over-year of 28% to $243 million from $212 million in 3Q16.

Next was the Granular Urea segment, which saw year-over-year sales growth of 26% to $228 million from $167 million, followed by the Ammonia segment, which experienced 22% year-over-year sales growth to $194 million from $145 million in 3Q16.

The AN (Ammonium Nitrate) segment was next with year-over-year sales growth of 16% to $135 million from $103 million over the same period, and the Other segment was at the bottom with year-over-year sales growth of 8% to $70 million from $53 million in 3Q16.

Why sales rose

Overall sales growth in the company’s 3Q17 was mainly driven by 33% growth in shipments. However, weakness in prices continued to negatively impact the company. CF Industries is one of the lowest-cost producers, situated close to cheap natural gas. This advantage may have driven the company’s 22% YTD (year-to-date) growth in its stock price. Compare this growth with rival companies (XLB) Terra Nitrogen (TNH), Agrium (AGU), and CVR Partners (UAN), which have underperformed CF Industries so far this year.


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