CF reports $158.8 M in 1Q earnings

CF Industries Holdings Inc. reported net income of $158.8 million ($2.77 per diluted share) on sales of $667.3 million for the first quarter ending March 31, 2008, compared to the year-ago $57.2 million ($1.02 per share) and $472.4 million, respectively. Higher fertilizer prices led the way for CF as nitrogen volumes were off due to wet spring weather. Phosphate volumes saw a modest increase due to exports.

Nitrogen gross margins were $197.5 million on sales of $437.8 million, up from the year-ago $90.7 million and $350.9 million, respectively. Total tons of product sold were 1.27 million st, down from 1.43 million.

Phosphate gross margins were $73.7 million on sales of $229.5 million, up from the year-ago $14.4 million and $121.5 million. Total tons sold moved up to 470,000 st from 461,000 st. Domestic tonnage was off at 389,000 st from 398,000 st, while exports were up at 86,000 st from 73,000 st.

As of April 21, CF said its forward pricing program bookings for the remainder of 2008 stood at 3.7 million st, compared to 1.5 million st at a comparable time last year. Nitrogen sales during the first quarter under the program totaled 949,000 st, 75 percent of segment sales, versus the year-ago 52 percent. Phosphate sales under the program were 325,000 st during the quarter, 69 percent of sales, versus the year-ago 41 percent.

As for forthcoming initiatives, CF said it has leased office space in Lima, Peru, in anticipation of supporting the development of a world-scale ammonia and urea plant in that country. As to the proposed gasification project at the Donaldsonville nitrogen complex, CF said initial estimates came in substantially higher than anticipated. As a result, it is reviewing alternative contractors and gasification technologies.

CF said the underlying global positives for agriculture remain strong. In addition, the wet weather has started to subside. “During the last two weeks, as field conditions have improved throughout much of the Corn Belt, we’ve seen a significant increase in shipping rates, and we believe the planting season should result in the expected strong spring volumes for nitrogen and phosphate fertilizers,” said Stephen Wilson, CF chairman and CEO. He added that at the 86 millions corn acres projected by USDA, it would still be the second highest corn acreage since 1944. Wilson noted that actual corn acreage last year was more than 3 million acres above USDA projections. He also said increased acreage for wheat and minor crops could help offset any reduced nitrogen demand from corn planting.

CF also reported that its board of directors has declared a $0.10 per share dividend on its common stock for the second quarter. The dividend will be payable on June 2, 2008, to stockholders of record as of May 15, 2008.

CF Production

* Volumes in thousands