UPDATE 1-Cheap natural gas helps CF Industries profit beat Street
Nov 5 (Reuters) - Fertilizer producer CF Industries Holdings Inc posted a better-than-expected quarterly profit on Monday as low-cost natural gas offset a drop in sales amid the dry North American summer.
The results highlight just how much cheap natural gas has helped fertilizer producers and other large industrial companies. CF's cost of natural gas fell 25 percent during the third quarter compared with the same period last year.
CF did try to raise prices on nitrogen fertilizer, the most-important fertilizer for farmers to apply. The strategy backfired though due in part to the North American summer drought and farmers applied less fertilizer.
The company's nitrogen sales fell about 2 percent to $1.1 billion. The drop would have been sharper were it not for the cheaper supplies of natural gas.
For the quarter, CF posted net income of $403.3 million, or $6.35 per share, compared with $330.9 million, or $4.73 per share, in the year-ago period.
Excluding one-time items, the company earned $5.85 per share.
By that measure, analysts expected earnings of $5.70 per share, according to Thomson Reuters I/B/E/S.
Revenue fell about 3 percent to $1.36 billion from $1.4 billion.
Last week, CF said it would spend $3.8 billion to expand ammonia and urea production capacity in Louisiana and Iowa.
Shares of the Deerfield, Illinois-based company rose 0.3 percent to $206.13 in after-hours trading on Monday.