U.S. fertilizer producer CF Industries (CF.N) on Wednesday reported a 10 percent jump in quarterly profit, helped by a gain from natural gas hedging.
Net earnings climbed to a record-high $406.5 million, or $6.47 per share, for the first quarter, from $368.4 million, or $5.54 per share, a year ago, the company said after markets closed.
Excluding one-time items, among them a $22.5 million gain from natural gas derivatives, the company earned $6.03 per share. Analysts on average were expecting $6.02, according to Thomson Reuters I/B/E/S.
Natural gas is a key ingredient in nitrogen production. In the year-earlier quarter, CF had posted a $55.9 million loss on natural gas hedging as prices fell steeply.
Shares of CF, the world's No. 2 nitrogen fertilizer maker after Norway's Yara International ASA (YAR.OL), rose 0.9 percent in after-hours trading in New York to $192.50. For the year, the stock is down 6 percent.
The Deerfield, Illinois-based company's sales of nitrogen and phosphate fertilizer fell during the period, from the 2012 quarter, when favorable weather allowed U.S. farmers to get an early start on fertilizer applications.
CF sold 3 million tons of nitrogen products during the quarter, a drop of 6 percent from the prior year period. Net sales of nitrogen fertilizers for the quarter totaled $1.1 billion, down 14 percent from a year earlier.
The company sold 495,000 tons of phosphate products in the period, compared with 516,000 tons a year earlier. Net sales were worth $238.9 million, down 7 percent from the prior-year quarter.
CF said it sees a positive performance in the current quarter and longer term, as high grain prices drive farmers to plant corn and apply fertilizer.
The company forecast that U.S. farmers will plant 96 million acres of corn this year, down 1 million from its estimate in February.
U.S. plantings of corn, a fertilizer-intensive crop, were just 12 percent complete as of Sunday, the slowest pace since 1984, the U.S. Department of Agriculture said on Monday. However, weather more conducive to planting is expected.
CF said it would spend between $600 million and $800 million in 2013 to expand capacity at its Louisiana and Iowa nitrogen complexes, dropping the range about $400 million from the previous estimate.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Carol Bishopric, Chizu Nomiyama and Steve Orlofsky)