Potash Corp. Profit Slumps 80%, Cuts Guidance
April 28 2016 - 9:00AM
Dow Jones News
Fertilizer giant Potash Corp. of Saskatchewan on Thursday
reported a nearly 80% decline in its first-quarter earnings and
lowered its profit outlook for the year as prices and demand for
its crop nutrients remain under pressure.
The Saskatoon, Saskatchewan-based company said weaker prices,
particularly for the key fertilizer ingredients of potash and
nitrogen, hurt its performance in its latest quarter, while a lack
of new contracts in China dampened potash demand.
The company said it now expects full-year earnings of between 60
cents and 80 cents a share, below its previous guidance of between
90 cents and $1.20 a share. In 2015, it earned $1.52 a share. It
also reduced the top end of its guidance for potash sales volumes,
and now expects between 8.3 million and 8.8 million metric tons
this year. It previously projected up to 9.1 million tons.
"Lower prices for all nutrients weighed on our performance for
the quarter and contributed to a more subdued outlook for the
year," Chief Executive Jochen Tilk said in a release.
The company said its average realized potash price in the first
quarter fell to $178 a ton from $284 a ton a year earlier, while
potash sales volumes slumped to 1.8 million tons from 2.3 million
tons a year earlier.
Potash Corp. earned $75 million, or 9 cents a share in the first
three months of 2016, down from $370 million, or 44 cents, a year
earlier.
It said results in the latest quarter included a 3-cent-a-share
charge related to its phosphate operations and a severance charge
of the same amount related to the suspension of operations at its
Picadilly potash facility in the east coast province of New
Brunswick.
Excluding items, earnings fell a penny shy of the 16 cents
analysts polled by Thomson Reuters expected.
Sales for the quarter fell 27% to $1.21 billion, which was
better than the $1.16 billion analysts projected.
Write to Judy McKinnon at judy.mckinnon@wsj.com
(END) Dow Jones Newswires
April 28, 2016 08:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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