CF Industries Reports Q4 Earnings Miss Due To Poor Fertilizer Prices, Shares Gain On CapEx Reduction

Shares of CF Industries Holdings, Inc. (NYSE: CF) were trading higher by more than 7 percent on Thursday after the company reported its fourth quarter results and updated its 2016 outlook.

CF Industries said it earned $0.76 per share in the fourth quarter on revenue of $1.116 billion. Wall Street analysts were expecting the company to earn $0.82 per share on revenue of $1.08 billion.

CF Industries noted that its quarterly revenue fell in the quarter from $1.2165 billion a year ago as the high supply of fertilizer resulted in lower average selling prices for its ammonia, granular urea, UAN, and Other segments. The company also cited currency headwinds, depressed feedstock and other input costs and reduced ocean freight costs which allowed producers to continue production which led to excess supply.

"Our business model demonstrated its resiliency in the face of some of the most difficult market conditions seen in a decade. Even at today's low prices, we remain highly profitable with a gross margin of over 25 percent, which includes the impact of the unrealized mark-to-market loss on our natural gas hedges. U.S. producers continue to enjoy cash margins of almost 50 percent," said Tony Will, president and chief executive officer, CF Industries Holdings, Inc.

Looking forward to the full fiscal year 2016, CF Industries expects its capital expenditures to total just $1.8 billion, marking a decrease from 2015's level of $2.469 billion and roughly in-line with 2014's $1.809 billion.