CF Industries 1Q profit falls, revenue tops view

[April 25, 2009]  DEERFIELD, Ill. (AP) -- Fertilizer maker CF Industries Holdings Inc. said its first-quarter profit fell 61 percent as higher costs pressured its margins even as revenue topped Wall Street estimates.

The Deerfield, Ill.-based company said after the markets closed Thursday that it earned $62.7 million, or $1.28 per share, for the three months ended March 31 compared with $158.8 million, or $2.76 per share, a year ago.

Results include nonrecurring gains related to adjustments on natural gas derivatives of $48.6 million, or 60 cents per share. Additionally, the company took a $24.3 million charge due to a write-down of potash inventory due to market price declines.

The company also incurred $20 million in "other operating costs" associated with its pursuit of rival Terra Industries Inc., its evaluation of a unsolicited takeover offer from Agrium Inc. and project development costs related to the company's proposed nitrogen complex in Peru.

The company did not provide an adjusted earnings per share figure that excludes the items. Analysts polled by Thomson Reuters expected a first-quarter profit of 71 cents per share, on average. Analysts typically exclude one-time items.

Revenue edged up 2 percent to $680.6 million from $667.3 million a year ago. Analysts expected much lower revenue of $478.7 million.

Terra has rejected takeover overtures from CF Industries, which in turn has rejected buyout offers from Agrium.

Most recently, stockholders of CF withheld about 20 percent of votes in a board election, Agrium said Tuesday that was a move to pressure the company.

But Stephen Wilson, chief executive of CF Industries, said the majority vote made clear stockholders' "overwhelming support" for the board of directors. Agrium has said it remains committed to the acquiring CF.

"Despite slow domestic shipments during the quarter and high industry inventory levels in the North American supply chain, both our net sales and volumes were up when compared to the year-earlier quarter," said Wilson.

"Realizing the difficult domestic market conditions early in the first quarter, we stepped up our actions to move product, particularly phosphate, into offshore markets."

Looking to the current quarter, Wilson said he remains optimistic that the U.S. corn belt will experience a strong spring planting season, despite the seasonally weak demand for fertilizer in the first quarter.

[Associated Press]

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