October 26, 2009 / 9:18 PM / 10 years ago

UPDATE 2-CF Industries Q3 slips 18 pct, misses Street

* Q3 EPS 78 cents vs. 82 cents

* Revenue falls 58 percent

* Shares down in after-hours trading

(Adds industry background, price information; updates share movement)

By Ernest Scheyder

NEW YORK, Oct 26 (Reuters) - Fertilizer producer CF Industries Holdings Inc (CF.N) said on Monday third-quarter profit fell 18 percent, missing Wall Street’s expectations, as prices and demand for its products plunged.

The fertilizer industry posted record profits a year ago as grain prices soared, driving a huge increase in fertilizer demand and a spike in pricing. But the recession, tight credit markets and weakened grain prices have hurt the sector’s results during the last year.

Deerfield, Illinois-based CF, which has launched a hostile bid for rival Terra Industries Inc TRA.N, said its average urea selling price fell 12 percent during the quarter and average ammonia and urea ammonium nitrate prices declined by about 50 percent.

“Domestic distributors and retailers remain hesitant to carry inventory because of the write-downs they experienced as prices fell last winter,” Chief Executive Stephen Wilson said in a statement.

Also during the quarter, the company’s natural gas cost fell by about 31 percent. Natural gas is an important feedstock for the fertilizer industry.

The company expects “reasonably good” fall demand and solid spring demand because of strong corn markets.

Last week, rival Agrium Inc AGU.TO, which is trying to buy CF, said its third quarter profit would drop 90 percent to 95 percent from a year earlier. [ID:nBNG237646]

For the quarter, CF posted net income of $38.5 million, or 78 cents per share, compared with $47.1 million, or 82 cents per share, in the year-ago period.

Excluding a proposed business combination and Peru project development costs of 21 cents per share, the company posted profits of 99 cents per share.

By that measure, analysts expected earnings of $1.02, according to Thomson Reuters I/B/E/S estimates.

Revenue fell 58 percent to $430.1 million. Analysts expected $438 million.

The company’s shares fell $1.41 to $84 in after-hours trading. (Reporting by Ernest Scheyder and Matt Daily; editing by Andre Grenon)

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