Potash Corp sees slow recovery in 2013; shares dip
By Rod Nickel
(Reuters) - Potash Corp of Saskatchewan (POT.TO: Quote) POT.N forecast a modest rebound in earnings for 2013, with key importers in China and eventually India resuming purchases of the crop nutrient potash, but the company's recovery will be more gradual than expected.
Potash Corp, the world's biggest fertilizer company, reported a surprisingly large drop in fourth-quarter profit on Thursday and gave a first-quarter outlook below Wall Street's forecast. The analysts' average estimate for all of 2013 was near the high end of Potash's range.
The company's shares were down 2.2 percent at C$42.26 in Toronto and 1.8 percent at $42.26 in New York in morning trading.
"My hope is they're being relatively conservative on the guidance for the full year," said analyst Spencer Churchill of Paradigm Capital. "If we see prices come up, we can start to see results get better."
Potash said it expected a first-quarter profit of 50 cents to 65 cents per share, compared with the analysts' average estimate of 68 cents, according to Thomson Reuters I/B/E/S.
For the full year, the company forecast a profit of $2.75 to $3.25 a share. That would be an improvement over a disappointing 2012, when Potash earned just $2.37, while the analysts' average 2013 view was $3.18.
A pause in potash buying by Chinese and Indian importers weighed on the company during the last two quarters.
Canpotex Ltd, which makes off-shore potash sales on behalf of Potash Corp, Mosaic Co (MOS.N: Quote) and Agrium Inc AGU.N AGU.TO, announced a six-month supply deal with a subsidiary of China's Sinofert Holdings Ltd 0297.HK on December 31, at a larger-than-expected price discount and volume. Continued...