Potash Corp Q2 Profit Misses Estimates, Trims Full-year View

(RTTNews) - Potash Corp of Saskatchewan Inc. (POT, POT.TO) reported Thursday a higher profit in its second quarter on the absence of prior year's impairment charge. Meanwhile, the earnings missed market estimates as contributions from each of the company's three nutrients fell. Further, the Canadian agricultural nutrient maker trimmed its fiscal 2013 earnings forecast sharply, below analysts' estimates.

President and Chief Executive Officer Bill Doyle said, "Global fertilizer demand was strong during the quarter, but highly competitive markets around the world had an impact on our results. Despite some weakening of prices in each of our nutrients, the continued engagement of buyers in our key markets was a positive sign."

For the second quarter, net income increased to $643 million or $0.73 per share, from last year's $522 million or $0.60 per share, which included a $0.39 per share impairment charge related to its investment in Sinofert Holdings Limited.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter declined to $2.144 billion from $2.396 billion in the prior year quarter. Nineteen analysts were looking for revenue of $2.19 billion for the quarter.

Gross margin of $1.0 billion declined from prior year's $1.2 billion, as contributions from each of the company's three nutrients fell.

Second-quarter potash sales volumes declined slightly to 2.5 million tonnes from last year, and average realized potash price was reduced to $356 per tonnes from $433 per tonne a year ago, primarily due to competitive pressures moving contract and spot market pricing lower.

Sales volumes of Nitrogen increased slightly to 1.4 million tonnes from last year's 1.3 million tonnes, while its average realized prices fell to $406 per tonne from $436 per tonne in the same period last year, primarily reflecting a sharp decline in Urea prices.

Looking ahead to the third quarter, the company expects earnings to be in the range of $0.45 to $0.60 per share. Analysts expect the company to report earnings of $0.73 per share.

Potash Corp. now forecasts full-year 2013 net income to be in the range of $2.45 to $2.70 per share, compared to prior estimate of $2.75 to $3.25 per share. Analysts expect the company to report earnings of $2.89 per share for fiscal 2013.

On Wednesday, Potash Corp. announced that its Board of Directors has approved the commencement of a share repurchase program authorizing up to $2 billion in repurchases, representing 5 percent of its outstanding common shares. The commencement of the share repurchase program is subject to regulatory approval.

In the pre-market activity, Potash Corp shares are currently trading at $36.45, down $1.49 or 3.93 percent on the NYSE.