CF Industries Earnings Approach

S&P 500 (NYSE:SPY) component CF Industries Holdings (NYSE:CF) will unveil its latest earnings on Monday, November 5, 2012. 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.

CF Industries Holdings Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $5.82 per share, a rise of 12.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from $5.45. Between one and three months ago, the average estimate moved up. It has risen from $5.79 during the last month. For the year, analysts are projecting net income of $27.09 per share, a rise of 18.3% from last year.

Past Earnings Performance: Last quarter, the company missed estimates by 21 cents, coming in at profit of $8.71 per share versus a mean estimate of net income of $8.92 per share. In the first quarter, the company beat estimates by $1.11.

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A Look Back: In the second quarter, profit rose 24.4% to $606.3 million ($9.31 a share) from $487.4 million ($6.75 a share) the year earlier, but fell short analyst expectations. Revenue fell 3.7% to $1.74 billion from $1.8 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.6 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Stock Price Performance: Between October 2, 2012 and October 30, 2012, the stock price dropped $17.20 (-7.7%), from $222.02 to $204.82. The stock price saw one of its best stretches over the last year between August 2, 2012 and August 9, 2012, when shares rose for six straight days, increasing 9.5% (+$18.47) over that span. It saw one of its worst periods between December 7, 2011 and December 14, 2011 when shares fell for six straight days, dropping 11.6% (-$17) over that span.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose more than twofold in the fourth quarter of the last fiscal year and 30.6% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 53.1% in the third quarter of the last fiscal year, 38.8% in the fourth quarter of the last fiscal year and 30.1%in the first quarter before dropping in the second quarter.

Wall St. Revenue Expectations: Analysts are projecting a decline of 3.6% in revenue from the year-earlier quarter to $1.35 billion.

Analyst Ratings: With 12 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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