* Q2 adj EPS $2.73 vs. Street forecast $3.16
* Revenue up 32 percent to $1.3 billion
* Strong nitrogen sales; weak phosphate results
* Sees strong fall fertilizer season
* Shares down 3.3 percent after-hours
By Ernest Scheyder
NEW YORK, Aug 5 Fertilizer producer CF
Industries Holdings Inc (CF.N) posted a lower-than-expected
profit on Thursday as integration costs for recently acquired
rival Terra Industries TRAQP.PK drained profit, sending
shares down more than 3 percent in after-hours.
The company spent more than $113 million during the period
to integrate Terra, which it bought in March for more than $4.6
billion. Executives said the integration is on track and
delivering the cost savings it had expected. [ID:nN07256392]
For the quarter ended June 30, the company posted net
income of $105.1 million, or $1.54 per share, compared with
$213 million, or $4.33 per share, in the year-ago period.
Excluding one-time items, the company posted profit of
$2.73 per share. By that measure, analysts expected earnings of
$3.16 per share, according to Thomson Reuters I/B/E/S.
For a graphic of CF's earnings: link.reuters.com/jyv53n
Revenue at the Deerfield, Illinois-based company rose 32
percent to $1.31 billion. Analysts expected revenue of $1.23
The results come the same day Russia banned wheat exports
due to a drought, sending benchmark U.S. wheat prices and
shares of fertilizer producers soaring. [ID:nN05144923]
Shares jumped in regular Thursday trading after the Russia
news, though in extended trading after the results were posted
the stock fell $2.80, or 3.3 percent, to $83.
CF's nitrogen production capacity was nearly doubled by the
Terra deal, and the product is now CF's breadwinner. Nitrogen
is the most important fertilizer that farmers need to apply,
followed by phosphate and potash, which CF does not produce.
Sales of nitrogen products jumped 49 percent as volume, or
the physical amount of product sold, and pricing both spiked.
CF said, though, that its phosphate sales fell 22 percent
as higher selling prices could not eclipse a drop in volume.
The company said it expects a strong fall fertilizer
application season due to an early harvest.
"We expect upward momentum in nitrogen to be sustained by
the combination of low inventories, seasonal supply outages,
solid demand, both domestically and internationally, and
favorable relationships between natural gas prices in North
American and other world markets," Chief Executive Steve Wilson
said in a statement.
Conditions in the phosphate markets, the company said, are
"favorable for the second half of 2010."
(Reporting by Ernest Scheyder; editing by Gunna Dickson)