01—Abstract
Summary
Summary of the 10-Q filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
CF Industries Holdings, Inc. reported net earnings attributable to common stockholders of $615 milliona, or $3.98 per diluted share, for the three months ended March 31, 2026, compared to $312 million, or $1.85 per diluted share, in the first quarter of 2025.
Net sales rose 19% to $1.99 billionb, driven primarily by a 28% increase in average selling prices to $424 per ton, partially offset by lower sales volume of 4.7 million tons versus 5.0 million tons. Gross margin increased 30% to $746 million, though higher natural gas costs reduced gross margin by $76 million and the idled Yazoo City plant weighed on AN volumes. The quarter's earnings were also boosted by non-recurring and one-time items: a $170 million litigation settlement gain from the resolution of litigation with Orica and Nelson Brothers, $25 million of Yazoo City property damage insurance recoveries, and $24 million of 45Q Tax Credits.
Management attributes the stronger pricing environment to tight global nitrogen supply, further affected by the conflict with Iran and disruptions through the Strait of Hormuz. Cash provided by operating activities was $496 millionc, down from $586 million, reflecting working capital changes and approximately $95 million of Canadian income tax deposits. The company continues to advance the Blue Point low-carbon ammonia joint venture, in which CF holds a 40% interest and consolidates the entity, with an estimated facility cost of approximately $3.7 billion.
Cash and cash equivalents were $2.04 billiond at March 31, 2026, and the company had $750 million of unused revolving credit capacity. Management also disclosed that the company is a defendant in putative antitrust class actions filed in March 2026 related to nitrogen, phosphorus and potassium fertilizer, and cannot estimate potential losses at this time.
02—Key points
Key Highlights
- Net earnings attributable to common stockholders of $615 million, or $3.98 per diluted share, versus $312 million, or $1.85 per diluted share, in Q1 2025
- Net sales of $1,986 million, up $323 million or 19%, driven by average selling prices of $424 per ton, up 28% from $332 per ton
- Gross margin of $746 million, up $174 million or 30%, with gross margin percentage of 37.6% versus 34.4%
- Litigation settlement gain of approximately $170 million recognized in Q1 2026, with the cash payment received on April 30, 2026
- Yazoo City incident: $25 million of property damage insurance recoveries recognized; AN production not expected to resume until late Q4 2026 at the earliest; initial insurance proceeds of $75 million received in April 2026
- Blue Point low-carbon ammonia joint venture: estimated facility cost of approximately $3.7 billion; CF holds 40%, JERA 35%, Mitsui 25%; capital expenditures for full-year 2026 projected at approximately $1.3 billion
- Cash and cash equivalents of $2.04 billion at March 31, 2026 and $750 million of unused revolving credit capacity
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, CF Industries Holdings kept $0.31.
- Revenue$1.99B100.0%
- Cost of revenue−$1.24B62.4%
- Gross profit$746.0M37.6%
- Operating costs$117.0M5.9%
- Operating income$863.0M43.5%
- Interest, other & tax−$248.0M12.5%
- Net income$615.0M31.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 7, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.99B$1.66B | +19.4% |
| Cost of Revenue | $1.24B$1.09B | +13.7% |
| Gross Profit | $746.00M$572.00M | +30.4% |
| SG&A Expenses | $103.00M$84.00M | +22.6% |
| Operating Income | $863.00M$455.00M | +89.7% |
| Interest Expense | $39.00M$37.00M | +5.4% |
| Net Income | $615.00M$312.00M | +97.1% |
| EPS (Basic) | $3.99$1.85 | +115.7% |
| EPS (Diluted) | $3.98$1.85 | +115.1% |
| Shares Outstanding (Basic) | 154.20M168.60M | −8.5% |
| Shares Outstanding (Diluted) | 154.50M168.80M | −8.5% |
05—Questions
Frequently Asked Questions
What drove the increase in CF Industries' first-quarter 2026 earnings?
Net earnings attributable to common stockholders rose to $615 million from $312 million, due primarily to a $174 million increase in gross margin, a litigation settlement gain of approximately $170 million, $25 million of insurance recoveries and $24 million of 45Q Tax Credits. These were partially offset by a higher income tax provision.
How did natural gas costs affect margins in the quarter?
The cost of natural gas used for production, including realized derivatives, rose 24% to $4.57 per MMBtu from $3.68 per MMBtu. This increase reduced gross margin by $76 million compared to the first quarter of 2025.
What is the status of the Yazoo City plant and its insurance claims?
Following a November 2025 incident in the AN upgrade area, the plant remains idled. Management does not expect production to resume until late in the fourth quarter of 2026 at the earliest. The incident is a covered event under the company's insurance, and the company received initial proceeds of $75 million in April 2026, with recovery of total claim value still being determined.
What legal matters could affect the company?
In March 2026, a putative class of direct purchasers of NPK fertilizer filed antitrust complaints against certain CF entities and other producers, alleging violations of the Sherman Act. The JPML will hear requests for consolidated proceedings on May 28, 2026. The company disputes the allegations and states it cannot estimate the amount or range of potential losses at this time.
How is the Blue Point joint venture being funded?
Blue Point is a variable interest entity that CF consolidates, with JERA and Mitsui's combined 60% interest recorded as noncontrolling interests. During Q1 2026, CF, JERA and Mitsui made capital contributions of $78 million, $68 million and $49 million, respectively. Management expects about $240 million of the joint venture's planned $600 million of 2026 capital expenditures to be funded by CF, with the remainder funded by its partners.
06—Continue