Nutrien expects to deliver higher sales, earnings in 2024 spurring market optimism

Nutrien Inc.’s latest earnings were met with market optimism based on forward-looking statements from the company, despite lower-than-expected fourth-quarter results, according to one analyst.

Steve Hansen, a managing director and equity analyst at Raymond James, said in an interview with BNN Bloomberg Thursday that the Saskatoon-based fertilizer company reported fourth-quarter earnings that were “a little bit light relative to expectations.” 

“I think the optimism in the market here is really around some of the forward-looking commentary around market stability in particular,” he said. 

“The potash markets have been under a good deal of pressure for the past year and change, coming off of some of the fly-up highs we had. But we're starting to see some stability on that side.” 

Hansen said buyers in the potash market have been essentially “on strike” for about two years. However, he added this dynamic is starting to change and demand has begun to pick up. 

On Wednesday, Nutrien, which reports in U.S. dollars, said it earned US$176 million during the fourth quarter of 2023, down from $1.12 billion during the same period a year earlier. 

The company said improvements in fertilizer affordability lifted North American potash demand in the fourth quarter. Increases in demand and offshore sales spurred potash sales volumes to record highs during the quarter. 

“We saw a continuation of strong fertilizer market fundamentals in North America during the fourth quarter driven by improved affordability, an extended fall application season and low channel inventories,” Ken Seitz, the Nutrien president and CEO, said in a press release Thursday. 

“As we look ahead to 2024, we expect to deliver higher fertilizer sales volumes and retail earnings, supported by increased crop input market stability and demand.” 

Ben Isaacson, an analyst and managing director of equity research at Scotiabank, said in a note to investors Wednesday that Nutrien missed expectations on earnings before interest, taxes, depreciation, and amortization (EBITDA) during the quarter. 

He said EBITDA came in at $1.01 billion, lower than the expected amount of $1.18 billion. 

For the full 2023 year, Nutrien said net earnings came in at $1.3 billion and adjusted earnings reached $6.1 billion, down from record highs in 2022 amid elevated fertilizer prices after Russia’s invasion of Ukraine. 

According to Nutrien, lower earnings in 2023 were reflective of lower selling prices across its business segments. 

With files from The Canadian Press.