Potash Quarterly Profit Doubles on Strong Demand

October 28 00:00 2011

New York, October 28 (RainbowNewsLine.com) – Strong demand for its crop nutrient products helped Potash Corp. to more than double its quarterly profit. The world’s top fertilizer maker said on Thursday that the strong demand for its fertilizers worldwide was due to the urge to capitalize on strong grain prices amid the widespread economic downturn.

The Saskatoon, Saskatchewan-based company said offshore demand for its nutrient remained strong in the quarter, while potash prices also increased, reflecting tight market conditions. The company’s net income was $826 million, or 94 cents a share, up from $343 million, or 38 cents a share, a year earlier.
The company said that on the basis of strong demand and higher prices across its potash, phosphate and nitrogen businesses revenue rose 47 percent to $2.32 billion. Its gross profit reached $1.1 billion, double the $550 million generated a year earlier.

The company forecast 2011 earnings of between $3.40 and $3.80 a share. Analysts, on average, have forecast earnings of $3.75. Dahlman Rose analyst, Charles Neivert said in a note to clients that some investors may be disappointed that the company maintained its full-year guidance despite strong prices.

Chief executive Bill Doyle said in a conference call that North American potash markets look “extraordinarily strong” for 2012. He added “The big issue for everyone to understand is we’re going to have an extraordinarily tight market because of the constraint on the production side.”

Potash Corp’s U.S.-listed shares were up 3 percent at $51.05 Thursday afternoon, while its Toronto-listed shares gained 1.8 percent at C$50.65.