CF 2Q sales up 6 percent, net income level

Long Grove, Ill.-CF Industries Holdings Inc. saw a 6 percent increase in sales during the second quarter, with near level net income. Net income was $42.6 million ($.77 per diluted share) on net sales of $664.8 million, compared to the year-ago $42.9 million and $626.7 million, respectively. “CF Industries’ strong second quarter earnings clearly indicate that the disruptions that 2005’s Gulf Coast hurricanes and resulting high natural gas prices brought to the U.S. fertilizer market have worked their way through the system,” said Stephen Wilson, CF chairman and CEO. “The spring season did see some reductions in corn acreage and an apparent reduction in fertilizer application rates. However, high operating rates, falling natural gas prices, and improved product pricing helped us achieve second quarter results that approached our strong second quarter 2005 performance.” Going forward, Wilson notes several positive factors, including improved forward orders. As of July 26, forward bookings for the third quarter were 523,000 st, versus the year-ago 1 million. For the second half they were 1.0 million st versus 1.8 million st. While behind year-ago figures, they compare well to those at the end of 2005. Other positives, according to Wilson, include moderate gas prices, improved crop prices, improved phosphate export demand, and fewer nitrogen imports. Six-month net earnings are still below the year-ago level at $18 million on sales of $1.06 billion, versus the year-ago $65.2 million and $1.09 billion.