Potash reports higher profits, lower outlook

  • Follow Business

Potash Corp., the world’s biggest fertilizer maker, offered a sobering near-term outlook on Thursday amid slipping demand for the crop nutrient potash, even as it finished a near-record profitable year.

The company, which owns one-fifth of the world’s potash production capacity, forecast earnings of 55 cents to 75 cents per share for the first quarter, well below analysts’ expectations of 84 cents, as economic turbulence rattled farmers and fertilizer dealers.

For 2012, Potash Corp. expects to earn $3.40 to $4.00 per share, compared with Wall Street expectations of $3.96.

Softer demand already has led Potash Corp to shut down potash production temporarily at three of its Saskatchewan mines this winter. The production cuts amount to 1.2 million tonnes, or 10 percent of Potash Corp’s operational capacity.

Potash Corp. is bullish about 2012 and its longer-term future, and backed up its hopes by doubling its dividend on Wednesday.

“Although fertilizer purchasing patterns can shift for short periods, the need to improve crop yields and the science of fertilizer demand do not change,” said Potash president and CEO Bill Doyle. “We understand the necessity of looking beyond short-term market fluctuations and preparing for the long-term growth that typically follows.”

Potash owns PCS Nitrogen, which has a facility in Augusta.

The company’s fourth-quarter earnings rose to $683 million, or 78 cents a share, from $508 million, or 56 cents a share, a year earlier.

Sales volume for all three crop nutrients - potash, phosphate and nitrogen - tailed off in the fourth quarter.

loading...
Search Augusta jobs