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Can CVR Partners (UAN) Spring a Surprise in Q1 Earnings?
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CVR Partners, LP (UAN - Free Report) is set to release first-quarter 2017 results, ahead of the bell on Apr 27.
Last quarter, the company delivered a negative earnings surprise of 533.33%. It posted a loss of 13 cents per share, compared to a profit of 26 cents reported a year ago.
On a year-over-year basis, the company’s net sales improved $84.9 million, up 29% in the fourth quarter. Revenues marginally beat the Zacks Consensus Estimate of $84.7 million.
Let’s take a look at how things are shaping up for this announcement.
Factors to Consider
CVR Partners is seeing a considerable improvement in nitrogen fertilizer pricing since Dec 2016, driven by the delay of additional supply coming onstream from new and expanded U.S. production facilities, reduced levels of imports into the U.S. and the expectation of a strong spring corn planting season in the U.S.
The company remains focused on ramping up its UAN production capacity and controlling costs. It also benefits from transportation cost advantage given the close proximity of its production facility to the U.S. Corn Belt.
CVR Partners is expected to gain from its strategic acquisitions and capacity expansion actions. With the buyout of Rentech Nitrogen Partners, the company has been able to create an entity with larger scale, enhance production capacity and increase operating reach. The combined company is now the second-biggest producer of UAN in North America. The merged entity is expected to realize synergies of at least $12 million, partly through savings in selling, general & administrative costs, and logistics and procurement improvements.
However, CVR Partners remains exposed to headwinds from weak nitrogen fertilizer prices. The company also faces intense price competition.
CVR Partners’ shares declined around 3.8% over the past six months, underperforming the Zacks categorized Fertilizers industry’s 2.9% gain.
Earnings Whispers
Our proven model does not conclusively show that CVR Partners is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for CVR Partners is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 2 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CVR Partners carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Concurrently, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
United States Steel Corporation (X - Free Report) has an earnings ESP of +15.63% and flaunts a Zacks Rank #1.
Metahnex Corporation (MEOH - Free Report) has an earnings ESP of +13.04% and sports a Zacks Rank #1.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Can CVR Partners (UAN) Spring a Surprise in Q1 Earnings?
CVR Partners, LP (UAN - Free Report) is set to release first-quarter 2017 results, ahead of the bell on Apr 27.
Last quarter, the company delivered a negative earnings surprise of 533.33%. It posted a loss of 13 cents per share, compared to a profit of 26 cents reported a year ago.
On a year-over-year basis, the company’s net sales improved $84.9 million, up 29% in the fourth quarter. Revenues marginally beat the Zacks Consensus Estimate of $84.7 million.
Let’s take a look at how things are shaping up for this announcement.
Factors to Consider
CVR Partners is seeing a considerable improvement in nitrogen fertilizer pricing since Dec 2016, driven by the delay of additional supply coming onstream from new and expanded U.S. production facilities, reduced levels of imports into the U.S. and the expectation of a strong spring corn planting season in the U.S.
The company remains focused on ramping up its UAN production capacity and controlling costs. It also benefits from transportation cost advantage given the close proximity of its production facility to the U.S. Corn Belt.
CVR Partners is expected to gain from its strategic acquisitions and capacity expansion actions. With the buyout of Rentech Nitrogen Partners, the company has been able to create an entity with larger scale, enhance production capacity and increase operating reach. The combined company is now the second-biggest producer of UAN in North America. The merged entity is expected to realize synergies of at least $12 million, partly through savings in selling, general & administrative costs, and logistics and procurement improvements.
However, CVR Partners remains exposed to headwinds from weak nitrogen fertilizer prices. The company also faces intense price competition.
CVR Partners’ shares declined around 3.8% over the past six months, underperforming the Zacks categorized Fertilizers industry’s 2.9% gain.
Earnings Whispers
Our proven model does not conclusively show that CVR Partners is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for CVR Partners is currently pegged at 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 2 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CVR Partners carries a Zacks Rank #3. Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
Concurrently, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
CVR Partners, LP Price and EPS Surprise
CVR Partners, LP Price and EPS Surprise | CVR Partners, LP Quote
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (CC - Free Report) has an earnings ESP of +4.08% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
United States Steel Corporation (X - Free Report) has an earnings ESP of +15.63% and flaunts a Zacks Rank #1.
Metahnex Corporation (MEOH - Free Report) has an earnings ESP of +13.04% and sports a Zacks Rank #1.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>