CF Industries Holdings, Inc. CF is set to release first-quarter 2025 results after the closing bell on May 7.

CF Industries beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once. The company delivered a trailing four-quarter earnings surprise of 18.1%, on average. CF is expected to have benefited from healthy nitrogen fertilizer demand in major markets and lower natural gas costs in the first quarter. Lower year-over-year selling prices are likely to have adversely impacted its performance.

Shares of CF Industries have gained 8.2% in the past year compared with the Zacks Fertilizers industry’s 9.2% rise.

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Let’s see how things are shaping up for this announcement.

What Do CF’s Revenue Estimates Indicate?

The Zacks Consensus Estimate for CF Industries' first-quarter total sales is currently pegged at $1,521 million, which indicates a roughly 3.4% decline year over year.

Our estimate for total sales in the Ammonia segment is currently pinned at $482.3 million, indicating a 20% upside on a year-over-year basis. The same for the Granular Urea segment is $419.9 million, which suggests an increase of 3.2%.

Our estimate for sales of the Urea Ammonium Nitrate Solution segment is currently pegged at $373 million, which suggests a decline of 12.2% year over year. Our projection for total sales of the Ammonium Nitrate segment is $106.8 million, which indicates a fall of 6.3% year over year.

Factors at Play for CF in Q1

CF Industries is expected to have benefited from strong global demand for nitrogen fertilizers fueled by robust agricultural needs. Industrial demand for nitrogen has rebounded following pandemic-related disruptions. The strong global demand is expected to have continued in the March quarter, supported by improved industrial activity and favorable economic conditions for farmers. In North America, high corn planting levels and low nitrogen inventories are projected to have boosted demand. Similarly, Brazil is expected to have seen strong urea demand due to increased corn acreage, while low inventory levels are likely to have driven demand in India.

On its fourth-quarter earnings call, CF Industries stated that it expects the global nitrogen supply-demand balance to remain favorable, citing below-normal inventory levels worldwide and challenging production economies for the industry’s marginal producers in Europe.

CF is also expected to have benefited from lower natural gas prices. It saw a decline in natural gas costs in the fourth quarter. The benefits of reduced gas costs are expected to have continued in the first quarter.

CF Industries is likely to have faced challenges due to continued weakness in nitrogen prices. Increased global supply, driven by higher production rates amid lower energy costs, put downward pressure on prices last year. In 2024, CF’s average selling prices declined from 2023 across all segments, as reduced global energy costs lowered the price needed to balance global supply and demand. Although pricing has recently shown signs of improvement, the year-over-year decline is likely to have negatively impacted the company’s sales and profit margins in the first quarter.

What Our Model Unveils for CF

Our proven model does not conclusively predict an earnings beat for CF this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for CF is -2.17%. The Zacks Consensus Estimate for the first quarter is currently pegged at $1.47. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CF currently carries a Zacks Rank #3.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Basic Materials Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

ICL Group ICL, slated to release earnings on May 19, has an Earnings ESP of +12.50% and carries a Zacks Rank #3. The consensus estimate for ICL’s earnings for the first quarter is currently pegged at 8 cents. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Mosaic Company MOS, slated to release earnings on May 6, has an Earnings ESP of +15.82% and carries a Zacks Rank #3 at present. The consensus mark for MOS’s first-quarter earnings is currently pegged at 39 cents.

Kinross Gold Corporation KGC, scheduled to release first-quarter earnings on May 6, has an Earnings ESP of +11.07%. The Zacks Consensus Estimate for Kinross Gold's earnings for the first quarter is currently pegged at 22 cents. KGC currently carries a Zacks Rank #2.


 

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This article originally published on Zacks Investment Research (zacks.com).

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