CF Industries shares reached a two-year high on Friday despite the fertilizer group becaming one of the few agriculture sector companies to disappoint analysts with its quarterly results.

The US nitrogen group reported earnings of $48.2m for the July-to-September quarter, up 25% year-on-year, and swollen by the hard-fought takeover of rival Terra Industries earlier this year.

Indeed, with its equity base swollen by new shares issued to help pay for the $4.7bn deal, earnings per share fell to $0.67 from $0.78 a year before.

Even excluding one-off effects, including a $25.7m mark-to-market loss on a natural gas hedge, CF's earnings per share were, at $1.10 per share, short of Wall Street forecasts of a $1.43-per-share result.

Winners and losers 

The result left CF as one of the few farm-related companies, with Archer Daniels Midland, to fall short on its results, with groups from tractor makers Agco and CNH Global to corn processors Corn Products International and Tate & Lyle, as well as fertilizer groups PotashCorp and Yara International, beating forecasts.

However, CF said that, with the outlook for its fertilizer markets "very favourable… business conditions are supportive of an extended period of strong cash flow".

The group highlighted its potential to exploit nitrogen markets tightened by surprise weakness in Chinese output, saying it "expects to benefit from these conditions", especially with extra capacity due to come on line at an Oklahoma urea plant.

Stephen Wilson, the CF chairman and chief executive, added that the market conditions would allow it to "reap the benefits of the [Terra] transaction even sooner and more completely".

The comments helped lift CF's New York-listed shares which, despite falling some 5% in after-hours deals, suggesting a weak start, actually surged when live trading began.

The shares jumped to $126.96 in opening deals, their highest since September 2008, before easing to closed at $122.47 up 1.1% on the day.

Besides firm crop prices, shares in many fertilizer groups are being boosted by speculation of further deals, potentially even involving BHP Billiton, which has had it $39bn bid for Saskatchewan-based PotashCorp blocked by the Canadian government.