Potash Corporation of Saskatchewan
(
POT
) announced that it has extended shutdowns at its Rocanville and
Lanigan potash mines in the Western Canadian province of
Saskatchewan. The strike has been extended by four weeks til March
31 in order to reduce inventories that are rising due to weak
demand.
The Rocanville mine, which has the capacity to produce 2.8
million tons of potash a year, was shut down in December 2011. The
company has extended the shutdown at the mine for the second time.
The first extension was announced by the company in January 2012.
However, Lanigan mine, which produces produce 3.4 million tons in a
year, was closed down in January 2012. This is the first time that
the company announced to extend the period of shut down at the
mine.
Recently, Potash Corp. reported earnings of 78 cents per share
in the fourth quarter of 2011, considerably lagging the Zacks
Consensus Estimate of 89 cents per share. However, reported
earnings increased 39% year over year.
For full-year 2011, earnings came in at $3.51 per share, up 80%
year over year. Fourth quarter 2011 sales were $1,865 million
versus $1,813 million in the fourth quarter of 2010. Fiscal 2011
sales were $8,715 million versus $6,539 million in 2010.
Although 2011 started on a positive note, it ended with weakened
demand. Potash Corp. expects global shipments in the range of 55-58
million tons for the year 2012. In North America, the current
cautious approach of dealers, who are managing their potash
inventories, is expected to keep shipments for the first quarter of
2012 below the year-ago level.
Potash Corp. forecasts first-quarter 2012 net income per share
to be in the range of 55 cents to 75 cents and earnings for the
full year 2012 to be between $3.40 and $4.00 per share.
Currently, the company retains a Zacks #4 Rank, which translates
into a short-term (1 to 3 months) Sell rating and we have
recommended the shares of the company as Neutral for the long-term
(more than 6 months). The company competes with
BASF
(
BASFY
) and
Mosaic Co.
(
MOS
).
BASF SE (
BASFY
): Free Stock Analysis Report
MOSAIC CO/THE (
MOS
): Free Stock Analysis Report
POTASH SASK (
POT
): Free Stock Analysis Report
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