Potash Corp profit surges, stock up despite outlook
By Scott Anderson
TORONTO (Reuters) - Potash Corp of Saskatchewan (POT.TO: Quote) reported a fourth-quarter profit that more than doubled on Thursday, and its shares surged even though it issued weaker than expected forecasts for 2009.
Potash, the world's biggest fertilizer company, said it sees 2009 potash shipments flat with 2008 or slightly lower even though it expects increased global demand in the second quarter.
The Canadian company forecast 2009 earnings of $10 to $12 a share, which is lower than the $12.72 a share, before items, expected by analysts surveyed by Reuters Estimates.
Potash forecast first-quarter earnings of 70 cents to $1 per share, also well below the consensus analyst outlook of $1.81 a share before items.
It said capital expenditures will be about $1.8 billion in 2009, compared with an estimated $1.2 billion for 2008.
Potash shares gained 6.7 percent to C$92.40 on the Toronto Stock Exchange on Thursday after falling 2 percent at the open.
"With 1Q 09 projected (EPS) at just 70 cents to $1.00, a substantial recovery in fertilizer demand (potash in particular) in 2Q 09 is likely necessary in order for (full year) guidance to be achievable," Morgan Stanley analyst Vincent Andrews, said in a note.
Morningstar analyst Ben Johnson said the company's outlook indicates confidence that high prices for potash, a key fertilizer ingredient, will hold through the course of the 2009 planting season. Continued...