CF Industries reported net earnings rose to a record $9.31 per diluted share in the second quarter of 2012, up from $6.74 per diluted share in the previous quarter. The firm, which is the second largest nitrogen fertilizer producer in the world and the third largest phosphate fertilizer producer among public companies, credited "a very favorable industry environment and excellent execution" as keys to posting the record. Says Chairman and CEO Stephen Wilson, "The company successfully capitalized on robust crop nutrient demand and a favorable pricing environment to set first-half records for shipments, revenues and profitability."
The firm said the combination of high planted acreage and a mild, early spring led to strong demand for all forms of nitrogen. Strong nitrogen prices at the start of the quarter gave way as spring field work concluded and "nitrogen prices experienced their normal end of season decline. Phosphate pricing favored export sales as the domestic market continued to be affected by distributor inventory carryover," the firm said.
The firm said it expects "robust fall ammonia demand as the North American supply chain restocks to support the high planted acreage anticipated next year. Given the large amount of ammonia applied in the first half of 2012, inventories are believed to be at or near historically low levels, creating a significant need, as well as potential challenges, to restock the North American agricultural ammonia supply chain. Additionally, global ammonia market prices have increased recently on concerns about tight supply as a number of off-shore producers expected to experience outages. These dynamics should support ammonia prices," the firm said.
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