Potash Corp. Profit Slumps 80%, Cuts Guidance

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 [e-mail]

(END) Dow Jones Newswires

April 28, 2016 08:45 ET (12:45 GMT)

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