Why Is Nutrien (NTR) Raising Guidance While Nitrogen Volumes Slide?

Nutrien (NTR) reported a rise in guidance during its second-quarter 2026 earnings call on August 6, as it sought to capitalize on its potash strength amid declining nitrogen and phosphate volumes. The company unveiled a widened range of 14.2 million to 14.8 million tonnes for its full-year potash sales guidance, driven by record potash sales volumes in the first half of 2026.

Potash generated $658 million in adjusted EBITDA in the quarter, with controllable cash costs remaining flat year over year and a target of below $60 per tonne for the full year. Automation covered 53% of ore tonnes mined in the first half, surpassing the 2024 target. Canpotex is committed to third-quarter volumes, thanks to the successful domestic summer fill program.

Nutrien cut its 2026 capital expenditure guidance by $50 million to $1.95 billion to $2.05 billion and increased first-half share repurchases by 26%, with the third quarter seeing roughly $75 million in repurchases. Retail adjusted EBITDA rose 4% in the first half to $1.24 billion, fueled by a 10% jump in predefined crop nutrients gross margin and sales volumes for specific nutritional products that nearly tenfolded from the previous year.

Gross divestiture proceeds totaled about $1 billion since the fourth quarter of 2024, including $90 million in new agreements since June 2026. Nitrogen sales volumes fell due to Trinidad and New Madrid production cessation, Carseland maintenance, and deferred customer purchases amid market volatility. Only 35% of total nitrogen segment volumes were sold before the Middle East conflict, exposing more of the book to a volatile pricing environment.

Global urea prices fell in the second quarter's back half during a seasonal demand lull, worsened by geopolitical developments. Phosphate adjusted EBITDA declined due to elevated sulfur costs, placing unsustainable pressure on producer margins. Nitrogen segment adjusted EBITDA was $635 million, with two turnaround plans at Lima and Redwater facilities in the third quarter.

Hedge fund ownership rose from 36 funds to 43, while short interest stood at 0.78% of float. Despite the stock trading at a forward P/E of 12.82, Nutrien's first half leaned on potash to fund buybacks, guidance increases, and a lower capital budget, with nitrogen and phosphate segments absorbing maintenance outages, cost pressure, and volatile order books.