CF Industries Holdings Inc. Earnings Cheat Sheet: Double-Digit Revenue Growth Continues

S&P 500 (NYSE:SPY) component CF Industries Holdings Inc. (NYSE:CF) reported higher profit for the third quarter as revenue showed growth. CF Industries Holdings is a manufacturer and distributor of nitrogen and phosphate fertilizer products, including ammonia, urea, urea ammonium nitrate solution, diammonium phosphate, and monoammonium phosphate.

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CF Industries Holdings Earnings Cheat Sheet for the Third Quarter

Results: Net income for CF Industries Holdings Inc. rose to $330.9 million ($4.73 per share) vs. $48.2 million (67 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year earlier quarter.

Revenue: Rose 53.1% to $1.4 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CF fell in line with the mean analyst estimate of $4.73 per share. Analysts were expecting revenue of $1.43 billion.

Quoting Management: “We believe CF Industries’ third quarter performance reflects the underlying strength of our business model and good execution,” said Stephen R. Wilson, chairman and chief executive officer, CF Industries Holdings, Inc. “We generated 45 percent gross margin and outstanding earnings during our seasonally weakest quarter. These earnings, combined with strong order volume and customer deposits for future periods, allowed us to achieve quarterly operating cash flow of $1 billion for the first time in company history.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 96.4%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the second quarter, it topped the mark by 93 cents, and in the first quarter, it was ahead by 58 cents.

Gross margins grew 26.9 percentage points to 45.4%. The growth seemed to be driven by increased revenue, as the figure rose 53.1% from the year earlier quarter while costs rose 2.5%.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $4.29 a share to $5.94 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $16.85 per to share to $21.17.

Competitors to Watch: The Mosaic Company (NYSE:MOS), Agrium Inc. (NYSE:AGU), Terra Nitrogen Co., L.P. (NYSE:TNH), Potash Corp./Saskatchewan (NYSE:POT), Converted Organics Inc. (NASDAQ:COIN), The Scotts Miracle-Gro Co. (NYSE:SMG), LSB Industries, Inc. (NYSE:LXU), China Green Agriculture, Inc (NYSE:CGA), China Agritech Inc. (NASDAQ:CAGC), and Bodisen Biotech, Inc. (BBCZ).

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(Source: Xignite Financials)