Nutrien shares rise on upbeat FY21 earnings guidance, YTD performance

Nutrien’s (NYSE: NTR) shares are trading in the black on Tuesday after the company released strong June-quarter operating and financial results and guided for full-year earnings per share well above average Wall Street expectations.

The Saskatoon, Saskatchewan-based crop nutrients giant cites its strong year-to-date operating performance and significant leverage to higher fertilizer prices for the upbeat outlook that sees it guiding for adjusted earnings per share of US$4.60 to US$5.10, from prior guidance of US$2.55 to US$3.25 per share. Analysts had on average expected full-year earnings per share of $3.99 apiece.

Nutrien reported surging net profit for the June quarter of US$1.11 billion, up 45% year-on-year from US$765 million a year earlier. Adjusted EBITDA increased 29% to US$2.21 billion from US$1.72 billion a year earlier, and free cash flow rose 20% to US$1.41 billion.

Post-tax adjusted net earnings were US$1.19 billion, or US$2.08 per diluted share, compared with US$824 billion or US$1.45 for the same quarter last year.

Sales increased by 20% to US$3.04 billion from US$2.53 billion in the year-earlier quarter, underpinned by higher prices and record North American and International sales volumes during the first half.

Crop protection products sales gained 9% year-on-year to US$2.66 billion, from US$2.43 billion a year earlier, due to market growth and favourable application conditions throughout most of the US, the company says.

These conditions saw seed sales growing 7% year-on-year to US$1.21 billion from US$1.14 billion, supported by solid agriculture fundamentals and more seeded acreage in key regions where the company operates.

Potash sales during the most recent quarter rose 39% to $817 million from $588 million a year ago, with sales volumes the highest of any second quarter on record. Nurtien says high crop prices and reasonable affordability support strong demand in North America and offshore markets.

During the period, nitrogen sales jumped 41% to $982 million from $696 million in the same period last year, as higher net realized selling prices more than offset higher natural gas costs and lower sales volumes.

Nutrien had guided full-year potash sales volumes of 13.3 million to 13.8 million tonnes earlier this year, placing in line to beat its 2018 record annual sales volume of 13 million tonnes. By the fourth quarter, the company expects to surge potash output to an annualized run-rate of about 17 million tonnes.

“We delivered record earnings across our global business for the second quarter and first half of 2021 and expect the remainder of the year to contribute to a full-year record. We showcased Nutrien’s unique competitive advantages, strong operating performance and the significant leverage to higher fertilizer prices as we focus on our purpose to help growers meet the ever-growing demand for increased food production in a sustainable manner,” said Nutien president and CEO Mayo Schmidt, Nutrien’s President and CEO said in a statement.

Shares quoted in New York are at US$64.05 (up 6.17% by midday Tuesday) up 80% in the year to date, trending near the company’s 12-month high of US$65.93. Nutrien has a market capitalization of US$36.57 billion.