CF Industries' Q2 Earnings Beat Estimates on Higher Prices

CF Industries Holdings, Inc. CF reported second-quarter 2025 earnings of $2.37 per share, up from $2.30 in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $2.35.

Net sales rose around 20.2% year over year to $1,890 million in the quarter, beating the Zacks Consensus Estimate of $1,732.7 million.

In the second quarter, average selling prices increased from the same period in 2024, driven by a rise in global energy costs that pushed up the global market-clearing price needed to meet demand. Additionally, sales volumes were higher year over year, mainly due to increased sales of UAN and ammonia.

CF’s Segment Review

Net sales in the Ammonia segment increased 20% to $491 million in the reported quarter, beating our estimate of $443.3 million. The adjusted gross margin per ton for ammonia rose in first-half 2025 from a year ago, mainly due to higher average selling prices and reduced maintenance costs, though this was partly offset by increased realized natural gas costs.

Sales in the Granular Urea segment rose 19.7% year over year to $547 million, topping our estimate of $426 million. The adjusted gross margin per ton for granular urea increased in first-half 2025 from the year-ago period, mainly driven by higher average selling prices, though partly offset by higher realized natural gas costs.

Sales in the UAN segment rose around 28.4% year over year to $610 million, beating our estimate of $482.8 million. The adjusted gross margin per ton for UAN remained relatively unchanged in first-half 2025 compared with first-half 2024.

Sales in the AN segment rose around 19.4% year over year to $117 million, beating our estimate of $97.4 million. The adjusted gross margin per ton for AN rose in first-half 2025 from a year ago, primarily due to increased average selling prices, though this was partly offset by higher realized natural gas costs.

CF’s Financials

As of June 30, 2025, CF Industries’ cash and cash equivalents were $1,686 million, down 7.3% year over year. Long-term debt was $2,973 million, flat year over year.

Net cash provided by operating activities was $563 million in the reported quarter, up nearly 18.5% year over year.

The company repurchased 2.8 million shares for $202 million in the second quarter of 2025.

CF’s Outlook

Per CF, the global nitrogen supply-demand balance is expected to remain favorable. This is driven by strong demand through the end of 2025, especially from Brazil and India. Brazil is projected to import more than 5 million metric tons of urea, supported by high corn planting, while India’s urea stocks are about 35% lower than last year, prompting frequent tenders. At the same time, global inventories remain below average, and supply is constrained due to natural gas shortages in Egypt and Trinidad and high gas prices in Europe. Chinese urea exports are capped at 3 million metric tons for 2025, with shipments likely to end after the third quarter as domestic restocking begins. These limited exports, combined with earlier production losses and strong demand, are unlikely to ease the global supply-demand balance.

CF’s Price Performance

Shares of CF Industries have jumped 13% in the past year compared with a 21.3% rise of the industry.

CF’s Zacks Rank & Other Key Picks

CF currently carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth a look in the basic materials space include Sylvamo Corporation SLVM, Avino Silver & Gold Mines Ltd. ASM and Barrick Mining Corporation B.

Sylvamo is slated to report second-quarter results on Aug 8. The Zacks Consensus Estimate for earnings is pegged at 47 cents. SLVM beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 6.5%. SLVM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avino Silver is scheduled to report second-quarter results on Aug 13. The Zacks Consensus Estimate for ASM’s second-quarter earnings is pegged at 3 cents. ASM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 104.2%. ASM currently carries a Zacks Rank #1.

Barrick Mining is slated to report second-quarter results on Aug 11. The consensus estimate for Barrick’s earnings is pegged at 47 cents. Barrick, carrying a Zacks Rank #1, beat the consensus estimate in three of the last four quarters, with the average earnings surprise being 12.5%.

 

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This article originally published on Zacks Investment Research (zacks.com).

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