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By Rod Nickel
Feb 18 (Reuters) - U.S. fertilizer producer CF Industries Holdings Inc posted a lower fourth-quarter profit on Tuesday, but the fall from record-high earnings a year earlier was not as steep as analysts had expected.
CF shares jumped 3.6 percent to $234.30 in New York after-hours trade following the company’s earnings announcement.
The price of nitrogen-based fertilizers and other crop nutrients fell in 2013 due to weaker demand in some key regions and higher global supply.
CF, the world’s second-biggest nitrogen producer after Norway’s Yara International ASA, benefits from relatively low-cost North American natural gas, a key input in nitrogen fertilizer production, but CF’s natural gas costs rose 4 percent during the period.
Ammonia demand in North America looks to be robust in the first half of 2014, assuming normal weather, but high inventories may constrain prices, CF said. The company said it expects U.S. farmers to plant 92 million acres of corn, a crop that consumes a lot of fertilizer.
Last year, U.S. farmers planted 95.4 million acres of corn.
Net earnings fell 31 percent, or $5.71 a share, to $325.8 million from $470.7 million, or $7.40 a share, a year earlier.
Net sales for the Deerfield, Illinois-based company dipped 10 percent to $1.3 billion.
Analysts had, on average, expected CF to earn $4.49 a share on sales of $1.26 billion, according to Thomson Reuters I/B/E/S.
CF’s net sales of nitrogen fertilizers for the quarter totaled nearly $1.179 billion, down 4 percent from the same quarter a year earlier.
The average selling price for ammonia dipped 10 percent during the quarter to $512 per ton, while the price of urea rose 15 percent year over year to $335 per ton.
Net phosphate sales totaled $147.6 million, down 42 percent from the prior-year quarter. The average selling price for diammonium phosphate (DAP) and monoammonium phosphate (MAP) fell 30 percent and 28 percent to $348 and $382 per ton, respectively.
CF Industries said in late October that it would sell its phosphate business to fellow U.S. fertilizer producer Mosaic Co for $1.4 billion to focus on its core nitrogen fertilizer products.
The deal is still awaiting regulatory approval.
Rival Yara last week reported fourth-quarter earnings well below expectations and said it was considering curtailing some production because of low margins. (Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Andre Grenon, Peter Galloway and G Crosse)