CF Industries Holdings, Inc. CF is set to release fourth-quarter 2024 results after the closing bell on Feb. 19.

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CF Industries beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters and missed twice. The company delivered a trailing four-quarter earnings surprise of 10.2%, on average. CF is expected to have benefited from healthy nitrogen fertilizer demand in major markets and lower natural gas costs in the fourth quarter. Lower year-over-year selling prices are likely to have impacted its performance.

Shares of CF Industries have gained 4.6% in the past year compared with the Zacks Fertilizers industry’s 4.3% rise.

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

What Our Model Unveils for CF Stock

Our proven model predicts an earnings beat for CF this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.

Earnings ESP: Earnings ESP for CF is +1.25%. The Zacks Consensus Estimate for the fourth quarter is currently pegged at $1.49. 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.

What Do CF’s Revenue Estimates Indicate?

The Zacks Consensus Estimate for CF Industries' fourth-quarter total sales is currently pegged at $1,466.4 million, which indicates a roughly 6.7% decline year over year.

Our estimate for total sales in the Ammonia segment is currently pinned at $447.5 million, indicating a 9.6% decline on a year-over-year basis. The same for the Granular Urea segment is $355.6 million, which suggests a decrease of 9.3%.

Our estimate for sales of the Urea Ammonium Nitrate Solution segment currently stands at $369.9 million, which suggests a decline of 11.5% year over year. The same for total sales of the Ammonium Nitrate segment is $95.5 million, which indicates a decline of 20.4% year over year.

Factors at Play for CF Stock in Q4

CF Industries is expected to have benefited from higher global demand for nitrogen fertilizers, being driven by strong agricultural demand. Demand for nitrogen is likely to have remained healthy in the December quarter on the back of recovering industrial demand and favorable farm economics. Higher demand is expected to have supported the company’s volumes in the quarter. 

Lower natural gas prices are also expected to have led to a decline in the company's cost of sales in the quarter to be reported. CF saw a decline in natural gas costs in the third quarter. The average cost of natural gas fell to $2.10 per MMBtu in the quarter from $2.54 per MMBtu in the year-ago quarter. The benefits of reduced gas costs are expected to have continued in the fourth quarter.

CF gained from higher selling prices in the third quarter due to increased average selling prices for ammonia from lower global supply availability. Per CF Industries, nitrogen prices globally were aided in the third quarter by strong global nitrogen demand and reduced supply availability due to natural gas shortages in Trinidad and Egypt, the absence of China from the urea export market and planned maintenance activities in the Middle East. While the company saw improved prices in the third quarter, weaker year-over-year prices are expected to have impacted its results in the fourth quarter.

CF Industries Holdings, Inc. Price and EPS Surprise

CF Industries Holdings, Inc. price-eps-surprise | CF Industries Holdings, Inc. Quote

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 too have the right combination of elements to post an earnings beat this quarter:

Avient Corporation AVNT, slated to release earnings on Feb. 13, has an Earnings ESP of +0.25% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for AVNT’s earnings for the fourth quarter is currently pegged at 48 cents.

Nutrien Ltd. NTR, slated to release earnings on Feb. 19, has an Earnings ESP of +5.20% and carries a Zacks Rank #2 at present.

The consensus mark for NTR’s fourth-quarter earnings is currently pegged at 33 cents.

Huntsman Corporation HUN, scheduled to release fourth-quarter earnings on Feb. 17, has an Earnings ESP of +7.72%.

The Zacks Consensus Estimate for Huntsman's earnings for the fourth quarter is currently pegged at a loss of 12 cents. HUN currently carries a Zacks Rank #3.

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