Potash Corp of Sakatchewan Inc.
) fourth-quarter 2012 adjusted earnings (excluding a provision
for settlement of antitrust claims) of 52 cents per share missed
the Zacks Consensus Estimate of 59 cents. Earnings, as reported,
fell to 48 cents per share from 78 cents per share a recorded a
For full-year 2012, adjusted earnings were $2.80 per share,
missing the Zacks Consensus Estimate of $2.99. Reported earnings
were $2.37 per share, down from $3.51 per share in 2011.
Sales came in at $1,642 million in the quarter, down 12% from
$1,865 million registered a year ago, missing Zacks Consensus
Estimate of $1,853 million. The year-over-year decline was due to
reduced contributions from all three nutrients arising from slack
global fertilizer markets and lower demand.
For full year, sales dipped 9% to $7,927 million and missed the
Zacks Consensus Estimate of $8,088 million.
Sales volumes of 1.3 million tons in the reported quarter were
down from 1.6 million tons in the year-ago quarter. Demand for
potash remained strong in North America and drove sales but were
offset by lower offshore sales volumes. Shipments to offshore
customers decreased on a year-over-year basis. This coupled with
lower realized prices led to a decline in gross margin. Gross
margin declined 42.2% year over year to $281 million.
Average realized potash price was $387 per ton, down 10.2% from
the prior-year quarter.
Sales volumes declined 5.8% year over year to 0.8 million tons,
due to lower production as a result of challenging mining
conditions at the company's Aurora mine. Average realized
phosphate price was $577 per ton, down 8.6% year over year on
lower solid and liquid fertilizer prices due to weak demand.
Gross margin went down 39.3% to $99 million.
Sales volumes for the segment decreased 1.3% to 1.1 million tons
due to gas interruptions in Trinidad. Gross margin decreased
14.5% to $206 million in the reported quarter. Average realized
prices for nitrogen products decreased 1.7% to $453 per ton.
Cash and cash equivalents amounted to $562 million as of Dec 31,
2012, versus $430 million as of Dec 31, 2011. Long-term debt was
$3,466 million versus $3,705 million a year ago. Capital
expenditure for the fourth quarter amounted to $628 million while
operating cash flow came in at $872 million.
The company expects earnings for the first quarter and full-year
2013 in the range of 50 cents to 65 cents per share and $2.75 to
$3.25 per share, respectively.
The company expects gross profits from its potash business in the
range of $1.9 billion to $2.4 billion in 2013. It expects
shipments in the range of 8.5-9.2 million tons. The combined
phosphate and nitrogen gross margin for full-year 2013 has been
forecasted in the range of $1.5 billion to $1.7 billion.
Capital expenditures for the year are anticipated to be about
$1.5 billion, with a significant portion related to the remaining
potash expansion projects at New Brunswick and Rocanville.
Potash Corp. currently retains a Zacks Rank #4 (Sell).
Other companies having a favorable Zacks Rank in the
fertilizer industry are
Rentech Nitrogen Partners, L.P.
Yara International ASA
). All these stocks carry a Zacks Rank #2 (Buy).
AGRIUM INC (AGU): Free Stock Analysis Report
POTASH SASK (POT): Free Stock Analysis Report
RENTECH NITROGN (RNF): Free Stock Analysis
(YARIY): ETF Research Reports
To read this article on Zacks.com click here.