Potash Corp. of Saskatchewan Inc. posted a 12% drop in its
second-quarter profit on Thursday and scaled back the top end of
earnings guidance for the year as weaker nitrogen prices impacted
results.
The Saskatoon, Saskatchewan company said increased global supply
weighed on nitrogen prices in the quarter, though pricing for
potash and phosphate—its two other key fertilizer
nutrients—improved from a year earlier.
Potash Corp. said quarterly potash sales volumes of 2.5 million
metric tons were in line with year-earlier levels, while its
average realized price improved to $273 a ton from $263. Potash
gross margin was $417 million, up from $395 million a year
earlier.
It said sales volumes for nitrogen were also similar to
year-earlier levels, at 1.6 million tons, while average nitrogen
prices fell 15%. Phosphate sales volumes fell 20%, it said, though
prices rose almost 9%.
Potash Corp. earned $417 million, or 50 cents a share, in the
latest period, the midpoint of the company's guidance range.
Analysts were expecting 51 cents a share.
Revenue fell 8.5% to $1.73 billion, just ahead of the $1.71
billion analysts expected.
For the year, Potash Corp. said it now expects earnings of
between $1.75 and $1.95 a share, compared with its previous view of
$1.75 to $2.05 a share.
It narrowed its full-year sales volume estimates for potash to
between 9.3 million and 9.6 million tons from previous guidance of
9.2 million to 9.7 million. It said also lowered the high end of
its potash gross margin range, now guiding for $1.5 billion to $1.7
billion, due to lower spot prices in some markets in the
quarter.
As reported in late June, Potash made a takeover approach to
German salt and fertilizer company K+S AG worth around $8.75
billion. The approach was rejected.
Potash Corp. said Thursday it still believes a business
combination with K+S would benefit the companies and remains
interested in holding talks with K+S management. It noted it hasn't
yet decided to make a formal offer.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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