CF to Report Q2 Earnings: What's in the Cards for the Stock?

CF’s shares have gained 27.6% in a year, outperforming the Zacks Fertilizers industry’s 47.9% decline. 

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Let’s see how things are shaping up for this announcement.

What do CF’s Revenue Estimates Indicate?

The Zacks Consensus Estimate for CF’s second-quarter consolidated sales is currently pegged at $2,434.7 million, calling for an increase of 28.8% from the year-ago quarter’s tally.

Factors at Play for CF Stock

CF Industries is expected to have benefited from strong global demand for nitrogen fertilizers fueled by robust agricultural needs. Global nitrogen requirements are expected to have remained strong in the June quarter due to healthy industrial demand and farmer economics.  

Demand in North America is being fueled by favorable farm economics. CF Industries is also seeing strong demand for urea from Brazil and India. These two countries are expected to remain significant importers of urea globally, driven by higher domestic requirements.

CF, on its first-quarter call, said the global nitrogen market remains tight in 2026 due to strong demand, geopolitical disruptions and constrained natural gas availability. The Middle East conflict has further tightened the global nitrogen supply-demand balance. 

Higher demand is expected to have driven the company’s sales volumes in the second quarter. Our estimate for total sales volumes (thousand tons) is 5,740 for the second quarter, indicating a 14.3% year-over-year rise.

Higher nitrogen prices are also likely to have supported the company’s performance in the second quarter. In the first quarter, net sales rose roughly 19% year over year on pricing strength. The average selling prices for the company’s core products increased compared to the prior year, driven by supply disruptions and strong global nitrogen demand. The favorable pricing trends are expected to have continued in the to-be-reported quarter. 

CF is expected to have faced headwinds from higher costs stemming from an uptick in natural gas prices. Higher prices of natural gas, a key feedstock for nitrogen fertilizer, have resulted in increased production costs for CF. It saw higher natural gas costs in the first quarter. The average cost of natural gas increased to $4.57 per MMBtu (million metric British thermal unit) from $3.68 per MMBtu a year ago, leading to a higher cost of sales. Natural gas prices have shot up in Europe and Asia due to constrained supply availability.

What Our Model Unveils for CF Stock

Our proven model does not conclusively predict an earnings beat for CF this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for CF is -0.18%. The Zacks Consensus Estimate for the second quarter is currently pegged at $5.65. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CF currently carries a Zacks Rank #3.

Basic Materials Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Avient Corporation AVNT, scheduled to release earnings on Aug. 6, has an Earnings ESP of +0.87% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for AVNT’s earnings for the second quarter is currently pegged at 89 cents.

Materion Corporation MTRN, slated to release earnings on Aug. 5, has an Earnings ESP of +5.39% and carries a Zacks Rank #2 at present.

The consensus mark for MTRN’s second-quarter earnings is currently pegged at $1.55.

Albemarle Corporation ALB, scheduled to release earnings on Aug. 5, has an Earnings ESP of +2.21%.

The Zacks Consensus Estimate for ALB's earnings for the second quarter is currently pegged at $3.35. ALB currently carries a Zacks Rank #3. 

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

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