CF Industries’ Q2 2026 net earnings to shareholders rose 88% to $727M and diluted EPS doubled to $4.73 as the Hormuz disruption lifted its average nitrogen price 39% while its US natural gas cost held flat at $3.37/MMBtu.
Revenue
$2.2B
+17.6% YoY
Net income
$727M
+88.3% YoY
Diluted EPS
$4.73
+99.6% YoY
Operating margin
50.5%
Overview
CF Industries, the world's largest ammonia producer, earned $727 million for its shareholders in Q2 2026 (quarter ended June 30), up 88% from $386 million a year earlier, and diluted EPS doubled to $4.73 from $2.37. The whole story is price. The Iran conflict closed the Strait of Hormuz to fertilizer shipping in March 2026. That cut off a region that CF says ships about 25–30% of the world's traded ammonia and 35–40% of its traded urea, and CF's average selling price jumped 39% to $523 per ton. CF actually sold 15% fewer tons (4.3 million vs 5.0 million), and its natural gas cost was flat. Almost all of the higher price therefore became profit: gross margin rose from 39.9% to 51.5% of sales.
The quarter also had a few one-offs (covered below): a $50 million insurance payment and a $23 million write-down, both tied to the idled Yazoo City, Mississippi plant. It also included $19 million of carbon-capture tax credits, which will now recur.
Key figures
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$2,222M
$1,890M
+17.6%
Gross margin
$1,145M
$755M
+51.7%
Gross margin %
51.5%
39.9%
+11.6 pts
Operating earnings
$1,121M
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Net earnings attributable to noncontrolling interests
$142M
$106M
+34.0%
Diluted EPS
$4.73
$2.37
+99.6%
Average selling price (all products)
$523/ton
$376/ton
+39%
Sales volume
4.25M tons
5.02M tons
-15%
Cost of natural gas used in production
$3.37/MMBtu
$3.36/MMBtu
flat
Diluted shares
153.9M
163.1M
-6%
Operating margin is the share of revenue left after running the business, before interest and tax. The filing rounds the EPS gain to "100%". The unrounded change is 99.6%.
First half (six months to June 30): net sales $4,208M (+18.4% from $3,553M); net earnings attributable to common stockholders $1,342M (+92.3% from $698M); diluted EPS $8.71 (+107% from $4.20). The half-year figure includes a roughly $170 million pre-tax gain ($129M after tax) from settling litigation with Orica in Q1, which inflates it relative to the underlying business.
Why prices jumped, and why cheap US gas is the whole business model
Nitrogen fertilizer is made by turning natural gas into ammonia. Gas is both the raw material (it supplies the hydrogen) and the fuel. CF says gas made up about 36% of its production costs in the first half of 2026. Fertilizer is a globally traded commodity, so the world price is set by the most expensive producer the market still needs, usually one that burns expensive imported gas. A producer with cheap gas sells at that same world price but pays far less to make each ton, and it keeps the difference.
That gap widened sharply in Q2. The 10-Q says Middle East supply disruptions "pushed global natural gas prices higher, significantly widening the premium over North American prices." Qatar, which the filing says supplies about 18% of global LNG (liquefied natural gas shipped by tanker), took its export plants offline in March. That shut down or slowed LNG-dependent fertilizer plants in India, Pakistan and Bangladesh. Meanwhile, the benchmark US gas price at Louisiana's Henry Hub averaged $2.93 per MMBtu (a standard unit of gas energy), down 7% year on year. CF's own cost, including hedges, was $3.37, versus $3.36 a year ago. All of CF's ammonia plants are in the US and Canada, so it paid almost the same for gas as last year while selling ammonia for 50% more.
In the first half as a whole, CF's gas cost did rise 14% to $4.01/MMBtu from $3.52. A January winter storm briefly sent Henry Hub spot prices to record highs, and CF says higher gas costs reduced first-half gross margin by $73 million. Hedging gains cut CF's first-half gas cost by $0.21/MMBtu.
Product by product
Segment
Q2 2026 volume (k tons)
YoY
Avg price/ton
Q2 2025 price
Gross margin
Q2 2025 GM
GM % (vs 2025)
Ammonia
865
-20%
$677
$452
$229M
$136M
39.1% (27.7%)
Granular urea
1,280
+8%
$593
$460
$477M
$279M
62.8% (51.0%)
UAN
1,391
-27%
$441
$321
$350M
$270M
57.1% (44.3%)
AN
129
-66%
$550
$310
-$4M
$25M
-5.6% (21.4%)
Other (DEF, urea liquor, nitric acid)
587
+26%
$329
$268
$93M
$45M
48.2% (36.0%)
Granular urea was the biggest earner. Urea is a solid fertilizer and the world's most-used nitrogen product, and it is also the product most exposed to the Middle East outage. Price was up 29% and volume up 8%, because CF's production mix favored urea over other products. Cost per ton actually fell 2% to $220 on lower gas costs. Gross margin rose $198 million, the largest dollar gain of any segment.
Ammonia prices rose 50%, but CF sold 20% fewer tons. CF blames weaker demand from phosphate fertilizer makers, which cut output because sulfur, one of their inputs, was scarce. More planned maintenance shutdowns ("turnarounds") also left less ammonia to sell. Cost per ton rose 26% to $412. The reasons were maintenance, fixed costs spread over fewer tons, higher gas costs in this segment, and pricier ammonia bought from others. Price alone added $192 million to segment gross margin. Lower volume took away $46 million, higher manufacturing and maintenance costs $39 million, and gas $15 million.
UAN (a liquid fertilizer) sales were flat despite a 37% price rise, because volume fell 27% on what CF calls "lower global demand." The drop in volume cost $96 million of gross margin. Higher prices added $169 million.
AN (ammonium nitrate) lost money. The Yazoo City plant, which makes ammonium nitrate in the US, has been idle since an incident in November 2025. AN volume fell 66%. The remaining sales came mostly from the UK Billingham plant, which buys in ammonia rather than making it from gas, so cost per ton more than doubled to $581.
One-off items and the 45Q tax credits
Some items in the quarter don't reflect normal operations (pre-tax / after-tax, from the filing's "Items Affecting Comparability" table):
Yazoo City business-interruption insurance: +$50M / +$38M
Yazoo City asset impairment (equipment written off once management approved a rebuild): -$23M / -$18M
45Q tax credits: +$19M / +$19M. These credits pay a set amount for each ton of CO2 captured and permanently stored underground. CF has earned them since its Donaldsonville, Louisiana CO2 dehydration and compression unit started up in July 2025. The first-half total was $43M. They are booked as operating income, and they should keep coming as long as CO2 is sequestered, so they are not really a one-off.
Blue Point development costs: -$7M / -$7M
Removing just the two Yazoo City items gives roughly $707 million of net earnings for common stockholders (our calculation from the filing's after-tax figures). That is still about 83% above last year. The one-offs did not drive the quarter.
Yazoo City itself: management approved a rebuild in Q2 and expects the plant to restart in the first half of 2027. CF has received $75 million of insurance so far ($25M property, $50M business interruption) and expects more to arrive during the rebuild. The $550 million capex guidance for existing operations excludes the rebuild cost. CF expects insurance to cover "a significant portion" of it.
Who gets the profits: CHS and the Blue Point partners
CF consolidates two businesses it doesn't fully own. That means it reports 100% of their results, then subtracts the partners' share as "noncontrolling interests":
CF Industries Nitrogen (CFN): farm cooperative CHS owns about 10%. In the first half, CHS's share of earnings was $211 million.
Blue Point One joint venture: JERA owns 35% and Mitsui 25%. Their share was a $8 million loss in the first half, because the plant is still being built.
In Q2, noncontrolling interests took $142 million of the $869 million total net earnings, up from $106 million. CF says the increase came mainly from higher CFN earnings. That $142 million is why this report uses the $727 million figure, not $869 million: only $727 million belongs to CF's shareholders.
Blue Point: the low-carbon ammonia bet
Blue Point One, in Modeste, Louisiana, is a planned $3.7 billion ammonia plant. It is designed to make about 1.5 million tons a year and capture more than 95% of the CO2 its production creates, about 2.3 million metric tons a year. A joint venture of Occidental and Enbridge would carry the CO2 away and store it permanently underground at its Pelican Sequestration Hub, which is still under development. CF expects the plant to qualify for 45Q credits. Production is expected in 2029. JERA and Mitsui have committed to buy their share of the output for power generation and steelmaking in Japan.
Progress this quarter:
State and federal permits arrived in July 2026, and construction started in August.
Project capex to date is $450 million, including $78 million in Q2. Partners have contributed $875 million in total ($351M from CF).
A lawsuit filed July 21, 2026 by local groups asks a court to suspend the Army Corps of Engineers permits. CF says it "cannot currently predict its final outcome." This is the main near-term risk to the timeline.
Separately, CF plans to spend about $550 million on shared infrastructure at the site (storage and ship loading), of which $59 million had been spent in the first half.
CF also says it began selling low-carbon upgraded products in 2026. The first sale was low-carbon UAN to PepsiCo.
Cash, buybacks and dividends
Operating cash flow of $1.37 billion in the first half (up $225M). This included the $170M Orica settlement and $50M of insurance, and it absorbed a roughly $194 million tax deposit to Canadian authorities.
Buybacks: CF repurchased 2.0 million shares for $230 million in Q2, compared with just $15 million in Q1. That leaves $1.48 billion of the $2 billion program (which runs through 2029) still available (our calculation). Buybacks are the reason diluted share count fell 6%, which is why EPS grew faster than net earnings.
Dividend raised 20% to $0.60 per quarter (declared July 8, 2026), from $0.50.
Cash: $2.48 billion at June 30, of which $341 million sits inside the Blue Point JV. The $750 million revolving credit line was undrawn.
Outlook
Takeaway: This was a profit windfall from a supply shock, not from selling more. CF sold 15% fewer tons, but its gas cost stayed about $3.37/MMBtu while the Hormuz closure and the LNG outage lifted fertilizer prices worldwide. Price alone added $588 million to gross margin. How long that premium lasts depends on geopolitics, not on anything CF controls.
CF gives no earnings guidance. The 10-Q gives these signals:
Prices were already easing by quarter-end. Nitrogen prices fell late in Q2 as the spring planting season ended, phosphate makers bought less ammonia, and a ceasefire began to look possible. CF also says damaged LNG and nitrogen plants in the region will take time to restart, since Qatar is talking about multiple years to return to full LNG capacity. It expects the supply impact to "persist in the near-term."
Capex of about $1.3 billion for 2026, which includes $550 million for existing operations, $600 million for Blue Point (CF funds $240 million of that), and about $150 million for the shared infrastructure.
Political risk has risen. On May 28, 2026, the FTC opened an industry-wide investigation into US fertilizer prices, and the administration has said it intends to lower fertilizer costs for farmers.
Volume should recover in 2027 when Yazoo City restarts in the first half, which would bring back AN and UAN tons.
Our view: Q2 is probably close to a peak quarter. In Q3, the late-quarter price declines will show up in results, and summer is the fertilizer industry's weak season. Also, Q2's operating earnings of $1.12 billion included $50 million of insurance and $19 million of tax credits that won't repeat at that size. The structural advantage is unchanged: CF's gas cost is a fraction of what its import-dependent rivals pay. With that advantage, $2.48 billion of cash, and a larger dividend, CF can keep funding buybacks and Blue Point even if prices keep falling. The things to watch are the Q3 selling price per ton against Q2's $523, whether ammonia and UAN volumes recover after the turnarounds, and the ruling on the Blue Point permit lawsuit.
Source: CF Industries Holdings Form 10-Q for the quarter ended June 30, 2026 (filed August 6, 2026). All figures are from the 10-Q unless marked as our calculation.