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Rentech companies sink after reporting heavy Q4 losses

  • Rentech (RTK -7.1%) and Rentech Nitrogen Partners (RNF -2.4%) tumble after posting wider than expected net losses and disappointing revenue.
  • RTK reported a Q4 loss of $0.06/share, $0.04 worse than the consensus analyst estimate, while revenues fell 14.3% Y/Y to $79.3M vs. $84.7M consensus.
  • RNF reported a Q4 loss of $0.45/share vs. consensus estimate of an $0.08 loss, while revenues fell 40.9% Y/Y to $54.6Mvs $69.7M consensus.
  • Management believes completed capacity expansion projects have increased production rates and should increase production for the year at the Pasadena and East Dubuque facilities.
Comments (8)
  • ALPHA BET SOUP
    , contributor
    Comments (184) | Send Message
     
    Have not regretted selling out of this a couple of years ago. Management always finds some way to come in under analyst estimates. There is always some cost that was higher than expected or some revenue level that was lower than anticipated. Every time.

     

    Shares in both RNF and RTK may provide good value here, but until Natural Gas Settles down I'm staying away.... My pick is Natural Gas prices will be the unanticipated cost next quarter.
    11 Mar, 05:07 PM Reply Like
  • Carbonyl
    , contributor
    Comments (116) | Send Message
     
    @Alpha, not only that they are already looking for the next big great thing. These guys jumps to the next project before they even have the previous one under control. Instead of buying all these companies over the past 2 years they should have invested their money in gas fields, protect the cost basis.
    11 Mar, 05:59 PM Reply Like
  • coothouse
    , contributor
    Comments (2) | Send Message
     
    Could this be the bottom?
    11 Mar, 06:13 PM Reply Like
  • jerrywengler
    , contributor
    Comments (402) | Send Message
     
    I sold my RNF in favor of buying more UAN, more reliable and uses a byproduct process to make fertilizer....not natural gas, but coke, etc., byproduct system. I've consistently gained because of the decision.
    11 Mar, 07:02 PM Reply Like
  • gabby1945
    , contributor
    Comments (220) | Send Message
     
    You might consider CVI since it owns UAN, and downstream refining which is being hurt by the WTI versus decreasing Brent spread . This will also pass with time when Brent makes another run because of some Geo-Politico headlines. It is on-sale now with limited downside risk, holding at $ 33.03. Could it go lower, yes?
    The $3.00 yearly dividend puts a floor on the downside, meaning even if it breaks it, the recovery back will be faster than something paying half as much to wait.
    I'm not recommending the stock, merely pointing out a way to get exposure to your favorite, UAN at a higher ROI while you wait for normal times to return. Political unrest, disruptions in supply, and EU economic variations working in concert could push it lower, as well as anything resembling a black swan event in their social/economic policies and banking system.
    12 Mar, 02:28 PM Reply Like
  • jerrywengler
    , contributor
    Comments (402) | Send Message
     
    Thanks, Gabby.
    13 Mar, 09:21 AM Reply Like
  • sebrich
    , contributor
    Comments (2) | Send Message
     
    I guess the bottom is at around $17, which would complete a tripple bottom. Quite disappointing. But it's no good idea to sell now where we are in panic. Better wait some weeks and the stock will be in a better mood.
    12 Mar, 04:59 PM Reply Like
  • gabby1945
    , contributor
    Comments (220) | Send Message
     
    RNF had some abnormal events last year costing time, production, and maintenance. One can add the drop in money returned to shareholders and it is not hard to see why this stock is bottoming.

     

    The advantage RNF has is two facilities producing, not just one (UAN). The disadvantage is buying a rising commodity, nat gas as a raw material for production versus using a byproduct from the refining arm of CVI that owns a large interest in UAN. It benefits CVI for UAN to be extremely profitable. We are not there yet, but we are reducing production from one area, and increasing production in a more profitable area. The overhead expense, along with dropping prices may be bottoming, meaning as sales increase, margins expand, and efficiency stabilizers, one should see greater profits for either company, RNF or UAN.
    Patience is a virtue.
    12 Mar, 06:12 PM Reply Like
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