On this call, we'll review the results, discuss our outlook, and then host a question-and-answer session. Yesterday afternoon, we posted results for the first quarter of 2026 in which we generated adjusted EBITDA of $983 million. Our performance in the quarter also reflected the tight global nitrogen supply-demand balance that carried into 2026. From a macro perspective, we believe recent geopolitical disruptions are driving a fundamental shift in our global industry's risk-return framework.
We believe the geopolitical risk premium that fragile and ex-exposed producers face will be an enduring structural headwind, increasing the cost of capital and adding cost and uncertainty for moving product to customers. As we have discussed in our last several earnings calls, the global nitrogen supply-demand balance has been structurally tight for more than a year. These dynamics have substantially raised the global clearing price to meet nitrogen demand. We continue to work with our customers to meet the last layers of demand for this season.
This includes leveraging our manufacturing, logistics, and distribution capabilities to increase nitrogen availability this spring. With this environment, we expect to see unmet demand in certain parts of the world. We also expect further structural tightening through the end of the decade as new nitrogen capacity under construction today falls short of the traditional nitrogen demand growth rate. For the first quarter of 2026, the company reported net earnings attributable to common stockholders of approximately $615 million or $3.98 per diluted share.
What went well
- Generated adjusted EBITDA of $983 million and net earnings of ~$615 million ($3.98 per diluted share); EBITDA was approximately $1 billion for Q1 2026
- Trailing-12-month operating performance was strong: ~$2.7 billion net cash from operations and ~$1.65 billion free cash flow, with industry-leading EBITDA-to-free-cash-flow conversion
- Ran available ammonia capacity at nearly 100% and posted a trailing-12-month recordable incident rate of 0.16 per 200,000 hours worked
- Results included a ~$170 million gain from the litigation settlement with Orica and Nelson Brothers (proceeds received in April)
- Executed logistics flexibility to boost spring supply: temporarily delayed a Donaldsonville turnaround to produce ~100,000 additional tons of urea and repurposed Yazoo City rail assets to move product into the Corn Belt
- Blue Point ammonia plant progressing (construction expected to commence in 2026, adding 1.5M+ tons gross capacity by late 2029) with an increased return profile amid the tighter market; low-carbon premium products seeing strong customer uptake (Pepsi, POET partnerships)
What went wrong
- The Iran conflict and closure of the Strait of Hormuz caused a severe global nitrogen supply shock, with an estimated 31 Middle East ammonia plants impacted, 49 plants in India/Pakistan/Bangladesh curtailed or shut on feedstock constraints, and 20-21 Russian plants droned by Ukraine
- Q1 gas costs were elevated at ~$4.50/MMBTU, with January/February Henry Hub spiking (February settling over $7/MMBTU) before easing later
- Share repurchases were light in the quarter at only ~150,000 shares for $15 million, as management stayed cautious given uncertainty over the conflict's duration
- U.S./NOLA is the lowest-priced nitrogen market globally (~$600/short ton) versus North Africa over $800/metric ton, with domestic retailers/co-ops liquidating inventory and reluctant to take open risk
- Company expects lower fertilizer consumption and declining yields in Latin America, Africa and Southeast Asia as high prices reduce application volumes globally
More on CF Industries Holdings, Inc.
Reported 2026-05-07 · figures from the CF Industries Holdings, Inc. Q1 2026 earnings call.