CF Industries Holdings, Inc. (CF) , JERA Co., Inc., Japan’s biggest energy company, and Mitsui & Co., Inc., a major global investment and trading firm, have signed a joint venture (JV) focused on building facility as well as production and offtake of low-carbon ammonia.The JV will be structured with CF Industries holding a 40% stake, JERA 35% and Mitsui 25%. Together, they will develop a low-carbon ammonia production facility at CF Industries’ Blue Point Complex in Louisiana. The facility will utilize autot ...

CF Industries Holdings, Inc. (CF) is expected to benefit from higher nitrogen fertilizer demand in major markets and lower natural gas costs amid headwinds from soft nitrogen prices.The company’s shares are down 7.5% over a year compared with a 4.6% decline of its industry.Image Source: Zacks Investment ResearchLet’s find out why CF stock is worth retaining at the moment.CF Stock Gains on Healthy Nitrogen Demand, Lower Gas CostsCF Industries benefits from the rising global demand for nitrogen fertilizers, w ...

Company Overview - CF Industries Holdings, Inc. (CF) is currently positioned as an intriguing investment choice due to solid earnings estimate revision activity [1][3] - The company has seen current quarter estimates rise from $1.39 per share to $1.52 per share, and current year estimates have increased from $5.83 per share to $6.20 per share [4] Industry Analysis - The Fertilizers industry has a Zacks Industry Rank of 59 out of more than 250 industries, indicating a strong position compared to other segments [2] - The positive trends in the Fertilizers space suggest that a rising tide may lift all boats, benefiting securities across the industry [2] Investment Potential - CF Industries is experiencing solid estimate revisions, which indicates a more bullish outlook from analysts regarding the company's short and long-term prospects [3][5] - The company currently holds a Zacks Rank 3 (Hold), which is considered a favorable signal for potential investors [4]

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Core Insights - Elliott Gue is recognized as a leading expert in the energy sector, with extensive experience and a strong educational background [1] - He has contributed to various reputable publications and media outlets, enhancing his credibility in energy investment analysis [1] - The Energy & Income Advisor, launched by Elliott Gue, focuses on identifying profitable opportunities in the energy sector, including growth stocks and high-yielding investments [1] Group 1 - Elliott Gue has dedicated over a decade to understanding the energy sector through various means such as attending industry conferences and engaging with management teams [1] - His expertise led to recognition at the 2008 G-8 Summit in Tokyo, where he was labeled "the world's leading energy strategist" [1] - The Energy & Income Advisor provides in-depth analysis and investment opportunities in the energy sector, including contributions from Roger Conrad on master limited partnerships and Canadian energy stocks [1]

Financial Performance - Total net sales decreased by $695 million, or 10%, to $5.94 billion in 2024 compared to $6.63 billion in 2023, primarily due to a $944 million, or 14%, decline in net sales excluding the impact of the Waggaman acquisition [250]. - Net earnings in 2024 were $1.48 billion, a decrease of $361 million compared to $1.84 billion in 2023 [352]. - Net earnings attributable to common stockholders for 2024 were $1.218 billion, a decrease of 20.1% compared to $1.525 billion in 2023 [396]. - Comprehensive income attributable to common stockholders for 2024 was $1.147 billion, a decrease of 26% from $1.546 billion in 2023 [399]. - Net cash provided by operating activities in 2024 was $2.27 billion, a decrease of $486 million compared to $2.76 billion in 2023 [352]. Sales and Volume - Total sales volume was 18.9 million product tons in 2024, a 1% decrease from 19.1 million product tons in 2023, with the Waggaman acquisition contributing an additional 644,000 tons [252]. - Net sales in the Ammonia segment increased by $57 million, or 3%, to $1.74 billion in 2024 from $1.68 billion in 2023, driven by a 15% increase in sales volume [280]. - Ammonia sales volume reached 4.1 million tons in 2024, a 15% increase compared to 3.5 million tons in 2023, influenced by the Waggaman acquisition and additional purchases [282]. - Granular Urea segment net sales decreased by $223 million, or 12%, to $1.60 billion in 2024 compared to $1.82 billion in 2023, primarily due to an 11% decrease in average selling prices [285]. - UAN segment net sales decreased by $390 million, or 19%, to $1.68 billion in 2024 compared to $2.07 billion in 2023, driven by a 13% decrease in average selling prices and a 6% decrease in sales volume [292]. Pricing and Costs - Average selling price decreased by 10% to $313 per ton in 2024 from $347 per ton in 2023, resulting in a decrease in net sales of approximately $716 million [251]. - Average selling price per product ton decreased by 10% to $425 in 2024 from $473 in 2023, reflecting lower global energy costs [280]. - Cost of sales averaged $204 per ton in 2024, a 5% decrease from $214 per ton in 2023, with natural gas costs decreasing by 35% to $2.40 per MMBtu [258]. - Gross margin for 2024 was $2.056 billion, down 19.2% from $2.545 billion in 2023 [396]. - Gross margin in the Granular Urea segment decreased by $139 million, or 17%, to $674 million in 2024, with a gross margin percentage of 42.1% compared to 44.6% in 2023 [287]. Expenses - Selling, general and administrative expenses increased by $31 million to $320 million in 2024, primarily due to increased amortization expenses related to the Waggaman acquisition [260]. - Interest expense decreased by $29 million to $121 million in 2024, mainly due to a reduction in interest on tax liabilities [268]. - The company reported depreciation and amortization expenses of $925 million in 2024, compared to $869 million in 2023, an increase of about 6.4% [406]. Cash Flow and Investments - Cash and cash equivalents balance as of December 31, 2024, was $1.61 billion, a decrease of $418 million from $2.03 billion at December 31, 2023 [306]. - Net cash used in investing activities was $469 million in 2024, a decrease of $1.21 billion compared to $1.68 billion in 2023 [353]. - The company purchased treasury stock amounting to $1,509 million in 2024, compared to $580 million in 2023, indicating a significant increase in stock repurchase activity [406]. Debt and Financing - The total long-term debt as of December 31, 2024, was $3 billion, with various senior notes and secured notes issued [331]. - The company has a senior unsecured revolving credit agreement providing for a revolving credit facility of up to $750 million, maturing on October 26, 2028 [324]. - As of December 31, 2024, the company had unused borrowing capacity of $750 million under the revolving credit agreement and no outstanding letters of credit [329]. Natural Gas and Derivatives - Natural gas costs decreased by 35% to $2.40 per MMBtu in 2024 from $3.67 per MMBtu in 2023, representing approximately 28% of total production costs [343]. - The company manages natural gas price risk primarily through derivative financial instruments, including fixed price swaps and options [434]. - Unrealized net mark-to-market gains on natural gas derivatives were $35 million in 2024 and $39 million in 2023, impacting cost of sales [346]. Acquisitions and Facilities - The acquisition of the Waggaman ammonia production facility was completed for a final purchase price of $1.221 billion, with a long-term ammonia offtake agreement to supply up to 200,000 tons of ammonia per year [312][313]. - The Waggaman facility's financial results were included in the Ammonia segment from December 1, 2023, contributing to increased sales volume and gross margin [280]. Other Financial Metrics - Total assets decreased from $14,376 million in 2023 to $13,466 million in 2024, a decline of approximately 6.3% [402]. - Total stockholders' equity decreased from $8,373 million in 2023 to $7,592 million in 2024, a decline of approximately 9.3% [402]. - The company declared cash dividends of $2.00 per share in 2024, up from $1.60 per share in 2023 [404].

Financial Data and Key Metrics Changes - CF Industries reported adjusted EBITDA of $562 million for Q4 2024 and $2.3 billion for the full year, with net earnings attributable to common stockholders of approximately $328 million, or $1.89 per diluted share for Q4, and $1.2 billion, or $6.74 per diluted share for the full year [7][20][21]. - The company generated net cash from operations of $2.3 billion and free cash flow of approximately $1.45 billion for the year, with a cash flow to adjusted EBITDA conversion rate of 63% [21][22]. Business Line Data and Key Metrics Changes - The production network achieved over 2.6 million tons of gross ammonia in Q4 2024, reflecting a 100% utilization rate, finishing the year with 9.8 million tons of gross ammonia production [10][11]. - The company expects to produce approximately 10 million tons of gross ammonia in 2025 [11]. Market Data and Key Metrics Changes - The global nitrogen market is experiencing a tightening supply-demand balance, particularly highlighted by India's struggles to secure targeted volumes for urea tenders [18]. - World corn stocks and the corn stocks-to-use ratio, excluding China, are at 13- and 30-year lows, indicating strong nitrogen demand in the U.S. for 2025 [18]. Company Strategy and Development Direction - CF Industries is advancing strategic initiatives, including the completion of a carbon capture and sequestration project at the Donaldsonville complex and evaluating a greenfield low-carbon ammonia plant at the Blue Point complex [12][13]. - The company aims to finalize investment decisions for the Blue Point project in Q1 2025, with ownership potentially ranging from 40% to 75% depending on equity partners [14][15]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position due to strong nitrogen industry fundamentals and the ability to generate superior free cash flow [8][28]. - The outlook for 2025 is positive, with expectations of robust demand for nitrogen products driven by low corn stocks and favorable agricultural conditions [18][95]. Other Important Information - CF Industries returned $1.9 billion to shareholders in 2024, the highest level in over a decade, including $364 million in dividends and over $1.5 billion in share repurchases [8][22]. - The company completed a FEED study for a 1.4 million metric tons per year ATR ammonia plant, with an estimated project cost of approximately $4 billion [24]. Q&A Session Summary Question: Discussion on hedging strategy and gas prices - Management indicated a more opportunistic approach to hedging in 2024, focusing on cash market strategies and front-month hedging [35][36]. Question: Sensitivity table for EBITDA based on gas and urea prices - The sensitivity table reflects last year's actual product price differentials, indicating potential EBITDA could be lower due to changes in market conditions [39][42]. Question: Capital allocation for 2025 and potential long-term offtakes - The company plans to allocate over $500 million for capital expenditures and expects to complete share repurchases by the end of the year [50][51]. Question: Demand outlook for the Blue Point project - Management expressed confidence in demand for the Blue Point project, with ongoing discussions with potential partners and a strong market interest [56][60]. Question: Risks impacting supply-demand and prices - Management acknowledged potential risks from geopolitical issues and economic factors but remains optimistic about the nitrogen market's fundamentals [138][139]. Question: Clarification on carbon sequestration plans - Management clarified that the carbon sequestration project is on track, with expectations to begin operations in the second half of 2025 [115][116].

2024 Fourth Quarter and Full Year Financial Results February 19, 2025 NYSE: CF Safe harbor statement All statements in this presentation by CF Industries Holdings, Inc. (together with its subsidiaries, the "Company"), other than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" or "would" and simil ...

Core Viewpoint - CF Industries Holdings, Inc. reported a strong fourth-quarter performance with earnings per share of $1.89, surpassing both the previous year's $1.44 and the Zacks Consensus Estimate of $1.49 [1][2]. Financial Performance - Net sales for the fourth quarter decreased by approximately 3% year over year to $1,524 million, but exceeded the Zacks Consensus Estimate of $1,466.4 million [2]. - For the full year 2024, earnings per share were $6.74, down from $7.87 in the previous year, with net sales declining around 10.5% year over year to $5,936 million [8]. Segment Review - The Ammonia segment saw a 15.5% increase in net sales year over year to $572 million, exceeding estimates, with an average selling price per ton of $461 [4]. - The Granular Urea segment experienced an 11.2% decline in sales to $348 million, missing estimates, while the average selling price per ton was $347 [5]. - The Urea Ammonium Nitrate segment's sales fell around 11% to $372 million, beating estimates, with an average selling price per ton of $231 [6]. - The Ammonium Nitrate segment's sales decreased by 15.8% to $101 million, surpassing estimates, with an average selling price per ton of $283 [7]. Cash Flow and Share Repurchase - CF Industries ended 2024 with cash and cash equivalents of $1,614 million, a decrease of approximately 20.6% year over year [9]. - The company repurchased 18.8 million shares for $1.51 billion in 2024, including 4.4 million shares for $385 million in the fourth quarter [9]. Market Outlook - The company anticipates a positive global supply-demand balance, with inventories considered below normal and challenging production economics for marginal producers in Europe [10]. - Expectations for higher U.S. corn returns compared to soybeans are driven by rising corn prices and lower yield predictions, which may boost nitrogen demand [11]. - Low urea inventory in India is expected due to strong domestic demand and lower-than-targeted domestic output [12]. Stock Performance - CF Industries' shares have increased by 8.6% over the past year, outperforming the industry average rise of 2.2% [13].

Group 1 - CF Industries reported quarterly earnings of $1.89 per share, exceeding the Zacks Consensus Estimate of $1.49 per share, and showing an increase from $1.49 per share a year ago, representing an earnings surprise of 26.85% [1] - The company posted revenues of $1.52 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.93%, although this is a decrease from year-ago revenues of $1.57 billion [2] - CF Industries has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] Group 2 - The stock has underperformed the market, losing about 2.5% since the beginning of the year compared to the S&P 500's gain of 4.2% [3] - The current consensus EPS estimate for the coming quarter is $1.39 on revenues of $1.47 billion, and for the current fiscal year, it is $5.83 on revenues of $5.96 billion [7] - The Zacks Industry Rank indicates that the Fertilizers industry is currently in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]