Fertilizer giant Potash Corp. of Saskatchewan Inc. (POT, POT.TO) Thursday raised its earnings guidance for the first quarter of the fiscal 2010, based on increasing demand for potash and higher margins in nitorgen and phosphate. Following the news, the company's shares rose 7% in the after hours trading on the Nasdaq.
Saskatoon, Canada-based Potash Corp.'s first quarter earnings is estimated to be in the range of US$1.30 per share to US$1.50 per share, up from the initial guidance of US$0.70 per share to US$1.00 per share.
On average, 10 analysts polled by Thomson Reuters currently expect the company to report a profit of US$0.94 per share for the first quarter. Analysts' estimates typically exclude one-time items.
The company noted that the upward revision in earnings reflect a sharp rebound in potash demand that is expected to drive a record quarter for North American sales volumes and strong offshore shipments, as well as higher-than-expected margins in nitrogen and phosphate.
Bill Doyle, president and chief executive officer stated, "Strong farmer returns, a depleted distributor pipeline and the agronomic need to replace soil nutrients have kick-started a potash rebound from 2009 lows. We believe the increase in potash sales volumes this quarter represents the beginning of a return to long-term growth in demand."
In the fourth quarter of the fiscal 2009, the company posted a 69% plunge in profit over last year, as the company recorded its lowest potash sales volumes since becoming a publicly traded company in 1989.
Profit for the quarter was US$243.6 million or US$0.80 per share, down from US$788.0 million or US$2.56 per share in the prior year quarter. Fourth quarter sales dropped 41% to US$1.10 billion from US$1.87 billion in the same quarter last year.
POT closed Thursday's regular trading session at US$116.93, down US$1.32 or 1.12% on a volume of 3.28 million on the NYSE. However in the after hours the shares rose 7.10% or US$8.30, trading at US$125.23.
POT.TO last traded at C$119.73, down C$1.57 or 1.29% on a volume of 0.56 million shares on the Toronto Stock Exchange.
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