UPDATE 2-CF Industries profit down less than feared, shares rise 2.7 pct
Aug 6 (Reuters) - U.S. fertilizer producer CF Industries Holdings Inc reported lower quarterly earnings on Tuesday as sales eased, and urea and phosphate prices declined, but the results were better than expected.
Shares of CF, the world's second largest nitrogen producer after Norway's Yara International ASA, rose 2.7 percent in after-hours trading on Tuesday to $194.75 in New York.
Net earnings for the second quarter fell to $498.2 million, or $8.38 per share, from $606.3 million, or $9.31 per share a year ago.
Net sales for the Deerfield, Illinois company declined 1 percent to $1.71 billion.
Analysts, on average, had expected CF to earn $7.62 a share on sales of $1.67 billion, according to Thomson Reuters I/B/E/S.
Ample supplies of shale-derived natural gas, a key ingredient in nitrogen production, have been a boon for CF, although the price of natural gas has rebounded in the past year.
CF sold 3.6 million tons of nitrogen products during the quarter, up from the year-earlier quarter's 3.5 million tons, due to timing differences in farmers' spring application season. Net sales of nitrogen fertilizers for the quarter totaled $1.53 billion, up 1 percent from a year earlier.
CF's average selling price for granular urea fell 26 percent from a year ago to $385 per ton, but prices of other nitrogen products rose.
A seasonal buildup of supplies looks to constrain nitrogen fertilizer prices in the short term, but that could change depending on plant downtime globally and gas supply problems in Egypt, Pakistan, Trinidad and Argentina, CF said in a statement.
CF predicted U.S. farmers will plant 92 million acres of corn in 2014, less than this year, but still a relatively large area, based on profitability of the crop that consumes a lot of nitrogen.
The company sold 421 million tons of phosphate in the period, compared with 493 tons a year earlier. Net sales were worth $189.7 million, down 18 percent from the prior-year quarter. The average selling price for both diammonium phosphate and monoammonium phosphate fell to $447 and $459 per ton, respectively, from $472 and $464 per ton, in the prior year.
Weak international demand for phosphates will likely keep a lid on prices for the rest of 2013, CF said.
The company is carrying out a $3.8 billion expansion of nitrogen production sites in Louisiana and Iowa and affirmed earlier guidance that it will spend between $600 million and $800 million this year.