CF Industries Inc. reported increased net income for both the fourth quarter and year ending Dec. 31, 2006. Fourth-quarter net income was $8 million ($.14 per share) on sales of $506.2 million, versus the year-ago loss of $12.8 million ($.23 per share) and $463.0 million. CF said the earnings were driven by increased sales volumes and improved nitrogen margins.
For 2006, CF reported net income of $33.3 million ($.60 per share) on sales of $1.95 billion, versus a 2005 loss of $39.0 million ($.71 per share) on sales of $1.91 billion. The 2005 figures were reported on a pro forma basis, and the loss was due primarily to items related to the company’s IPO.
Noting Doane Agricultural Service’s forecast for 87.1 million of corn acres this spring, CF chairman and CEO Stephen Wilson noted that CF has an extensive presence in the U.S. Corn Belt and is poised to take advantage of this opportunity. Wilson also noted the moderation of U.S. gas prices, and rising gas prices in other nitrogen exporting nations – Ukraine, Belarus, and Romania. These, coupled with high ocean freight, have made imports less competitive in the U.S. market. Wilson tempered his enthusiasm, noting that the weather, more imports, higher gas, and other factors can still impact the market.
CF said as of Feb. 6 that bookings for all of 2007 under its forward pricing program (FPP) were 1.9 million tons, up from nearly 1.4 million tons at a comparable time last year.
Fourth-quarter nitrogen gross margins were $31.8 million on sales of $384.7 million, versus the year-ago negative margin of $6.4 million on sales of $358.2 million. For 2006, nitrogen margins were $98.5 million on sales of $1.47 billion, versus 2005’s $172.9 million and $1.47 billion.
Fourth-quarter phosphate gross margins were $11.1 million on sales of $121.5 million, up from the year-ago $8.7 million and $104.8 million, respectively. For 2006, margins were $48.7 million on sales of $482.3 million, versus 2005’s $36.3 million and $438.7 million, respectively.