Potash Corp Cuts Full-year View Yet Again As Q3 Results Miss Estimates

(RTTNews) - Potash Corp of Saskatchewan Inc. (POT, POT.TO) Thursday cut its earnings per share outlook for full-year 2013 once again, after reporting results that missed analysts' estimates, hurt by weaker prices for all three nutrients and lower potash sales volumes.

While reporting its second-quarter results, the firm had slashed its earnings estimate from the prior range of $2.75 to $3.25 per share.

The Canadian agricultural nutrient maker noted that weaker prices for all nutrients, and market uncertainty lead to lower potash sales volumes, with many buyers delaying purchases. Third-quarter production was 1.2 million tonnes, down 27 percent from the same quarter of 2012.

Average realized price dropped to $307 per tonne from $429 per tonne a year earlier that reflected buyer caution and competitive pressures in all key markets. In both the offshore and North American markets, pricing weakened as the quarter progressed, the firm said.

Potash gross margin declined to $228 million from $554 million reported last year.

Average realized nitrogen price decreased to $327 per tonne from $458 per tonne, and average realized phosphate price was $467 per tonne, down from $537 per tonne in the preceding year.

Bill Doyle, president and chief executive officer of the company said, "As we have seen in the past, fertilizer customers faced with uncertainty act with extreme caution. This was the case during the third quarter, particularly in offshore potash markets, where significant purchases were delayed as Russian producer pronouncements left buyers waiting in anticipation of weaker prices."

For the third quarter, the company posted net income of $356 million or $0.41 per share, lower than $645 million or $0.74 per share in the previous year.

On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.43 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter fell to $1.52 billion from $2.14 billion in the prior-year quarter, which also came slightly below analysts' estimate of $1.53 billion.

Gross margin contributions from all three nutrients were negatively affected by a challenging fertilizer market, the firm noted.

For full-year 2013, the company now sees net income to be in the range of $2.00 to $2.20 per share, down from the prior estimate of $2.45 to $2.70 per share. Analysts expect the company to report earnings of $2.35 per share for 2013.

POT closed Wednesday's regular trading at $31.70 on the NYSE. In the pre-market activity on Thursday, the shares are down 0.82 percent.

POT.TO ended on Wednesday at C$32.93.