It has been about a month since the last earnings report for Nutrien (NTR). Shares have lost about 4.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutrien due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Nutrien Misses Earnings and Revenue Estimates in Q1
Nutrien recorded first-quarter 2023 profits of $576 million or $1.14 per share, down from $1,385 million or $2.49 in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $1.11. The bottom line missed the Zacks Consensus Estimate of $1.54.
Sales decreased around 20.2% year over year to $6,107 million in the quarter. The figure missed the Zacks Consensus Estimate of $6,672.9 million.
Nutrien's results were hurt by lower realized selling prices across its segments and reduced sales volumes in Retail, Potash and Phosphate units. These were partly offset by the lower cost of goods sold due to a decline in natural gas costs and higher operating rates at its North American nitrogen plants.
Sales in the Nutrien Ag Solutions (Retail) segment declined 11% year over year to $3,422 million in the quarter. Sales of crop nutrients decreased due to lower selling prices.
The Potash division’s sales decreased 46% year over year to $1,002 million due to lower net realized selling prices and sales volumes. Sales volumes in the segment fell in North America due to just-in-time buying.
Sales in the Nitrogen segment were $1,179 million, down around 22% year over year. The downside can be attributed to lower net realized selling prices for all major nitrogen products. Sales volume witnessed a slight increase, benefiting from increased production of Urea in Canadian facilities.
Sales in the Phosphate segment were $446 million, down 21% year over year due to lower production volumes and cautious buying activity.
At the end of the quarter, Nutrien had cash and cash equivalents of $1,473 million, up around 63% sequentially. Long-term debt was $9,510 million, up roughly 18%.
The company repurchased around 11.8 million shares year to date as of Mar 31, 2023, for a total of roughly $900 million.
Nutrien revised its full-year 2023 adjusted EBITDA guidance and full-year adjusted net earnings per share guidance, factoring in lower expected benchmark fertilizer pricing and lower expected natural gas costs in North America.
The company now expects adjusted EBITDA of $6.5-$8 billion for full-year 2023. Adjusted EPS has been forecast in the band of $5.5-$7.5.
The company estimates potash sales volumes of between 13.5 million and 14.3 million tons for 2023. Nitrogen sales volumes are expected to be in the band of 10.8-11.4 million tons for the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -19.37% due to these changes.
Currently, Nutrien has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nutrien has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutrien is part of the Zacks Fertilizers industry. Over the past month, CF Industries (CF), a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended March 2023 more than a month ago.
CF reported revenues of $2.01 billion in the last reported quarter, representing a year-over-year change of -29.9%. EPS of $2.85 for the same period compares with $4.21 a year ago.
For the current quarter, CF is expected to post earnings of $2.19 per share, indicating a change of -64.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -13.2% over the last 30 days.
CF has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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