What happened

Shares of CVR Partners (UAN 1.87%), a limited partnership that produces fertilizer products, rose a huge 12.5% out of the gate on May 2. By 11 a.m. ET or so, the gain had pared back to roughly 9%, still a fairly impressive figure.

The big news was the partnership's first-quarter 2023 earnings update, which hit the market after the close on May 1. Only it probably wasn't earnings that got investors excited.

So what

CVR Partners reported first-quarter 2023 sales of $226.3 million, up from $222.9 million in the year-ago period. Management noted that the prices for UAN and ammonia, its main fertilizer offerings, were down 8% and 16%, respectively, compared to the first quarter of 2022. However, it was able to produce and sell more product in the first stanza of 2023, leading to higher overall sales. Also noted was an $18.1 million monetization of tax credits, with more such monetizations expected in the future. 

Moving down the income statement, CVR Partners was able to reduce its cost of sales and selling, general, and administrative expenses. That helped to support earnings before interest, taxes, depreciation, and amortization (EBITDA) and net income.

On the bottom line, earnings per share came in at $9.64, up from $8.78 in the same quarter of 2022. Management noted that the spring planting season is off to a strong start, which it expects will be supportive of near-term results.

All in, it was an OK quarter, but hardly stellar, given the various crosscurrents in the partnership's results (notably, lower prices offset by higher volumes).

Now what

The really big news was likely the partnership's announcement that it will pay a $10.43-per unit quarterly distribution. That's huge and follows on a $10.50-per-unit distribution paid earlier in the year.

That the distribution was maintained at such a lofty level is probably what has investors so upbeat about CVR Partners today. But dividend investors looking at the massive distribution and yield (listed at 27% or higher on major online quote services) need to take the numbers with a grain of salt. The partnership has a variable distribution policy, which means you can't simply count on the payment remaining at the current level. In fact, a year ago, the distribution was just $2.26, and in the fourth quarter of 2022, it was only $1.77.

In other words, unless you will be following this partnership very closely, it is not an income investment worth owning if what you are really looking for is income consistency.