Will Fertilizer Fallout Hurt or Help CF Industries Holdings, Inc. (CF) Earnings?

The new variable in CF’s business comes from the recent move from Russian fertilizer giant Uralkali to exit a major potash cartel, which could send potash prices plunging. Strong prices for high-margin urea ammonium nitrate made it CF’s best performing product and helped boost rival CVR Partners LP (NYSE:UAN) as it makes plans to put just about all of its ammonia production toward urea ammonium nitrate. But with farmers having moved away from the potash-based fertilizers that Potash Corp./Saskatchewan (USA) (NYSE:POT) focuses on, CF might now see the reverse of that strategy hurt its business if farmers move back to potash as expected price declines make it look more attractive.

In the CF earnings report, look for comments from the company about hedge-fund investor Dan Loeb’s recent purchase of the company’s stock for his Third Point Management fund. With Loeb arguing the stock is cheap, investors have to feel confident that there’s plenty of room for the stock to move higher despite — or perhaps because of — turbulence in the rest of the fertilizer space.

The article Will Fertilizer Fallout Hurt or Help CF Earnings? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of CF Industries.

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