March 1, 2010 / 2:46 PM / in 8 years

UPDATE 2-Intrepid Potash profit misses; 2010 rebound seen

* Q4 EPS 9 cents vs Street 11 cents

* Q4 revenue drops 8 pct

* Expects sales volumes to improve in 2010

* Shares slip 1.3 percent in morning trading (Recasts; adds details, background, byline, share movement)

By Ernest Scheyder

NEW YORK, March 1 (Reuters) - Intrepid Potash Inc (IPI.N) posted lower-than-expected fourth-quarter earnings on Monday as prices for its products fell by almost half, though the fertilizer maker said it is upbeat about 2010 demand.

The Denver-based company produces potash, a mineral used as a key fertilizer by farmers throughout the world. Unlike most other fertilizer producers, which tend to also sell nitrogen and phosphate, Intrepid primarily produces potash, leaving it subject to sharp swings in pricing.

During the fourth quarter, Intrepid’s potash prices fell to $408 per short ton from $762 in the year-ago period. Even as prices fell, though, Intrepid sold 60 percent more potash during the period compared with the same period in 2008.

Also, the fourth quarter was unseasonably wet in North America, and a late harvest kept some farmers from applying fertilizer before the winter set in, further dampening results.

However, Intrepid said it has seen “robust activity” thus far in 2010 and says farmers appear to be applying potash at “more typical levels.”

In response to the uptick in demand, Intrepid said it will ramp up utilization at its West mine to achieve its forecast of higher production rates by the middle of 2010.

“We believe that 2010 sales volumes should be improved from the last twelve months, and we are beginning to ramp-up our mines and plants to operate at more normal production rates,” Chief Executive Bob Jornayvaz said in statement.

BY THE NUMBERS

For the fourth quarter, the company posted net income of $6.7 million, or 9 cents a share, compared with $22.7 million, or 30 cents a share, a year ago.

Revenue dropped 8 percent to $73.1 million.

Analysts, on average, expected earnings of 11 cents a share on revenue of $64.3 million, according to Thomson Reuters I/B/E/S.

Shares fell 37 cents to $27.15 in morning trading.

Reporting by Ernest Scheyder in New York and Antonita Madonna Devotta in Bangalore; Editing by Jarshad Kakkrakandy, Dave Zimmerman

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