Here’s an update on a company having a record year as the global fertilizer market enjoys a strong cyclical recovery.
Nutrien Corp. (TSX: NTR) Recent close C$80.12
Background: Nutrien is the world’s largest producer of agricultural fertilizers. This includes nitrogen and phosphates which it sells in bulk and at the retail level to farmers through a network of more than 2,000 stores, which dominates in North America and Australia and is expanding in Latin America.
Performance: Nutrien’s shares are up about 28% year-to-date and 59.8% in the last 12 months at the time of writing.
Recent developments: In August, Nutrien reported record second quarter earnings and raised its outlook for the year as strong crop prices increased demand for its products.
Nutrien earned $1.1 billion in the three months ending June 30, up 44% from the same period last year. (Note that the company reports in US dollars. Net earnings were $1.19 billion ($2.08 per diluted share), 44% higher than a year ago.
Revenue was 17% higher at $9.54 billion. The shares hit a 52-week high on the news.
Nutrien has raised its net earnings guidance for the year from a range of $2.55 to $3.25 a share to $4.60 to $5.10 a share.
Discussion: In the spring, Nutrien said it was seeing the start of a multiyear cyclical recovery in agriculture and crop inputs. In the latest earnings statement, CEO Mayo Schmidt said those trends are firming up and Nutrien expects to report record earnings for the year. Crop prices continue to be supported by strong demand, resulting in historically low global inventory and strong grower margins.
Dividend and buybacks: Nutrien raised its quarterly dividend for the third time in three years to US$0.46 per share in February (US$1.84 per year). It yields almost 3% at current prices. It plans to buy back up to 5% of its shares over the next year.