Potash Corp forcastTORONTO -- Potash Corp of Saskatchewan said Thursday itsfirst-quarter earnings rose, driven primarily by a sharp rebound inpotash demand, but the company’s outlook fell far short of expectations,sending shares down 4.1%.
“The quarter itself was fine and[results were] great. It’s just the guidance that is not robust enoughfor people right now,” said Broadpoint AmTech analyst Edlain Rodriguez.
“Butagain it depends on how aggressive or conservative they [Potash Corp]want to be. I think they would rather surprise on the upside thandisappoint,” he added.
The company raised its full-year earningsforecast to a range of US$4.50 a share to US$5.25 a share from aprevious forecast of US$4.00 to US$5.00. However, the revised rangestill falls short of Wall Street’s current consensus forecast of US$5.52a share, according to Thomson Reuters.
The company’ssecond-quarter forecast of earnings of US$1.00 a share to US$1.30 ashare is also shy of Wall Street’s average forecast of US$1.46.
PotashCorp, the world’s largest fertilizer maker, has stayed cautious withits forecasts this year, after it was forced to repeatedly cut its 2009outlook in the face of weak potash demand.
Shares of the companywere down US$4.51 to US$104.50 in trade before the morning bell in theUnites States.
Net income for the quarter ended March 31 rose toUS$449.2 million, or US$1.47 a share, up from a year-earlier profit ofUS$307.4 million, or US$1.01 a share.
“We believe the higherdemand we are seeing today is a precursor to a longer-term rebound asfarmers strive to catch up on applications missed in 2009,” said ChiefExecutive Bill Doyle, in a statement.
Quarterly revenue rose 86%to US$1.71 billion, driven primarily by a jump in potash sales volumes.
Potash— the common name used to describe compounds containing potassium —emerged from obscurity a few years ago when high grain prices, tightsupplies and strong demand drove the nutrient to above US$1,000 a tonnefrom less than US$150.
The price gradually retreated last year, asfarmers, hit by the credit crisis and falling grain prices, reined intheir applications of the nutrient. But demand has begun to pick-upagain, as the spot price has fallen to about the US$400 a tonne level
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