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Potash Corp. 2014 Earnings Forecast Trails Estimates
By Christopher Donville
Januar 30, 2014 8:30 AM
Potash Corp. of Saskatchewan Inc. , the world’s largest fertilizer producer by market value, forecast 2014 earnings that trailed analysts’ estimates after the price of its namesake crop nutrient fell 24 percent.
Profit will be $1.40 to $1.80 a share, the Saskatoon, Saskatchewan-based company said today in a statement. That compares with the $2 average of 28 analysts’ estimates compiled by Bloomberg. Potash Corp. also cut its estimate for 2014 global shipments. Shares of potash producers fell.
Potash Corp.’s “projections for its sales and for the global market would seem to indicate that demand response from farmers to lower potash prices has not yet been robust,” Greg Barnes, a Toronto-based analyst at TD Newcrest Inc., said today in a note to clients.
Buyers of potash, a form of potassium used to increase crop yields, deferred purchases in the second half of 2013 after OAO Uralkali (URKA), the world’s largest producer, quit a sales accord in July with its Belarusian competitor and announced plans to boost output. The rift has undermined prices and raised concern among investors that the market will remain oversupplied.
Expectations Low Potash Corp. said global potash shipments this year may rise about 5 percent to 55 million to 57 million metric tons. In December, the company gave an estimate of 56 million to 58 million tons.
“Although we believe conditions are supportive for record potash demand, achieving such levels will largely depend on consistent buyer engagement,” it said in today’s statement.
Potash Corp., which released its statement before the start of regular trading, dropped 3.7 percent to $30.65 at 7:53 a.m. in New York while Israel Chemicals Ltd. (ICL) fell as much as 3.4 percent in Tel Aviv . Germany’s K+S AG fell 2 percent in Frankfurt and Uralkali slid 1.1 percent in London.
Uralkali earlier this month agreed to sell 700,000 tons of potash to China for $305 a ton, 24 percent less than the price it agreed to before it exited the joint supply arrangement with Belaruskali that controlled 40 percent of global exports.
Potash Prices Potash Corp. sold potash on average for $282 a ton in the fourth quarter, 27 percent less than a year earlier. Potash Corp. also produces nitrogen and phosphate crop nutrients and said prices for both also fell during the period.