The Incitec Pivot Ltd (ASX: IPL) share price is sliding lower in early trade following the company's release of a business and performance update.
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Why is the Incitec share price on the slide?
The Incitec share price is heading lower today despite the company advising it expects to deliver cost savings of at least $30 million in FY2021 as previously announced. The manufacturer is also reportedly anticipating higher earnings in FY2021.
In its Fertilisers Asia Pacific segment, Incitec expects favourable weather conditions and firming fertiliser prices.
A combination of those two things looks set to provide a welcome earnings boost. Higher expected pricing also looks set to accentuate Incitec's usual second-half earnings skew.
However, it wasn't all good news for the company, which likely explains the Incitec share price's lacklustre performance this morning. In the Dyno Nobel Americas Explosives segment, Incitec reported unplanned downtime due to equipment failure.
The total earnings impact of the outages is expected to be US$11 million to be included in the first-half results. Excluding these impacts, Incitec is forecasting segment earnings in line with guidance.
In its Dyno Nobel Asia Pacific Explosives segment, performance is tracking as expected. Incitec reported lower metallurgical coal exports have not materially impacted earnings to date.
More about Incitec Pivot
Incitec is a leading Australian manufacturer of fertiliser, explosives chemicals and mining services. Based on the current Incitec share price, the company has a market capitalisation of around $5.1 billion with a 1.8% dividend yield.
In this morning's updates, Incitec advised it has now completed its Waggaman plant turnaround discovery phase. The company noted an incremental US$15 million earnings impact from the turnaround extension and plant outage, making a total US$40 million impact.
Planning and preparation for a major turnaround of its Moranbah plant in May 2021 remain on track. Incitec reported successful completion of a 6-week turnaround in November 2020 at its St Helens plant.
Incitec also completed planned maintenance at its Mt Isa/Phosphate Hill plant in October 2020.
Foolish takeaway
The Incitec share price is heading lower this morning after dual updates from the Aussie manufacturer. Incitec is set to report its interim results on Monday 17 May 2021.
