UPDATE 4-Potash Corp sees weaker than expected year ahead, shares dive

Thu Jan 30, 2014 2:34pm EST
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(Updates with CEO comments on idle capacity)

By Rod Nickel

Jan 30 (Reuters) - Potash Corp of Saskatchewan , the world's biggest fertilizer company, on Thursday reported its smallest quarterly profit in four years and produced 2014 forecasts that were well below Wall Street expectations.

The company's disappointing outlook shows that the global potash market has far to go to recover from a slide in prices, due to years of soft demand, burgeoning supplies and last summer's breakup of rival Belarusian Potash Company (BPC).

Shares of Potash Corp, the world's biggest producer of the crop nutrient by capacity, dropped 1.5 percent in New York to $31.35 by early afternoon, paring earlier losses when shares hit their lowest level in three months.

Potash said it expected a first-quarter profit of 30 to 35 cents per share, widely missing analysts' average estimate of 48 cents, according to Thomson Reuters I/B/E/S.

For the full year 2014, the company forecast a profit of $1.40 to $1.80 a share. That would be even lower than its performance during the disappointing past year, when it earned $2.04 per share, and the outlook fell well below analysts' average 2014 view of $2.00 earnings per share.

The mid-point of that 2014 profit range, $1.60 per share, would represent Potash Corp's least profitable year since global potash prices collapsed in 2009.

"The whole potash saga, which commenced with Uralkali (quitting BPC) last year, has been bouncing investors left, right and center," said John Goldsmith, vice-president and deputy head of equities at Montrusco Bolton Investments, which owns Potash stock.   Continued...