May 7, 2010 / 1:25 PM / 7 years ago

UPDATE 3-CF Industries posts Q1 loss; sees strong Q2

* Q1 loss 9 cts/shr vs. year-ago EPS $1.28

* Revenue down 26 pct

* Terra integration "off to a good start"

* Gulf Coast oil leak may affect phosphate operations

* Shares up 1.5 percent (Adds conference call, oil spill; updates stock)

By Ernest Scheyder

NEW YORK, May 7 (Reuters) - Fertilizer maker CF Industries Holdings Inc (CF.N) posted a first-quarter loss and steep drop in revenue on Friday, but said it expects results to sharply improve in the second quarter.

An unusually wet spring forced farmers to apply nitrogen and other fertilizers in April, harming first-quarter results but paving the way for a potentially robust second quarter for CF.

On a conference call with investors, Chief Executive Stephen Wilson said light customer stocking in the first quarter sets CF up for "strong" results in the current quarter and that he expects U.S. demand for phosphate to increase 15 percent in 2010.

CF shares rose $1.13 to $75.29 in midday trading.

Production of all types of fertilizer jumped during the first quarter, though average selling prices slipped.

"Spring really got rolling in April, and when it got rolling, it got rolling huge," Dahlman Rose analyst Charles Neivert said. "The real big numbers are going to show up in the second quarter."

The company's nitrogen production capacity was nearly doubled after last month's acquisition of rival Terra Industries TRAQP.PK.

Nitrogen is the most important fertilizer that farmers need to apply, followed by phosphate and potash, which CF does not produce.

OIL LEAK

The oil leak along the Gulf Coast should not affect nitrogen production, Wilson said.

However phosphate products, which are produced in Florida and shipped across the Gulf and up the Mississippi River, could be affected, he said.

The company may need to rely on railroads to ship product if that happens, a scenario the company would like to avoid, Wilson said.

So far the leak has not affected U.S. ports on the Gulf or access to the Mississippi, government and port officials said. [ID:nN06410828]

BY THE NUMBERS

CF reported a net loss of $4.4 million, or 9 cents per share, compared with net income of $62.7 million, or $1.28 per share, in the year-earlier period.

The period included one-time charges of $150 million and a one-time gain of $28.3 million.

CF declined to provide an adjusted earnings-per-share figure.

Revenue fell 26 percent to $502.4 million. Analysts expected $502.4 million.

CF's buyout of rival Terra Industries closed April 15. [ID:nLDE62B0AA]

Terra earned $47 million in the first quarter, up from $30 million a year earlier, CF said.

The company's stock has traded between $67.94 and $110 in the past 52 weeks.

CF rival Intrepid Potash Inc IPI.N said on Tuesday its first-quarter profit rose 21 percent. [ID:nSGE6430MO] (Reporting by Ernest Scheyder; Editing by Derek Caney, Dave Zimmerman)

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