Potash Corporation of Saskatchewan Inc. (POT - Analyst Report) announced that it has received clearance from the Toronto Stock Exchange (the TSX) for its share buyback program to purchase for cancellation of up to 43,345,992 common shares over a one-year period subject to a maximum aggregate amount of $2 billion. This represents 5% of the company’s outstanding common shares.
According to Potash Corp., it will purchase its shares between Aug. 2, 2013, and Aug. 1, 2014. There were 866,919,856 common shares outstanding as of Jul 30. Common shares repurchased under the program will be cancelled.
As per the program the shares can be bought through the facilities of the Toronto Stock Exchange, the New York Stock Exchange or other published markets by means of open market transactions. The purchases may also be made by other means or as permitted by the Toronto Stock Exchange and applicable U.S. securities laws.
The buyers can purchase the common shares at the market price at the time of purchase or a price as may be permitted by applicable regulatory requirements. Potash Corp will determine the actual number of common shares that may be repurchased under the program and the timing of any such repurchases.
The move by Potash Corp testifies its commitment to boost shareholders’ value.
Potash Corp., which is among the prominent players in the fertilizer industry along with CF Industries Holdings, Inc. (CF - Analyst Report), The Mosaic Company (MOS - Analyst Report) and Agrium Inc. (AGU - Analyst Report), recently released its second-quarter 2013 results. The company’s earnings of 73 cents per share missed the Zacks Consensus Estimate of 82 cents, but were up from 60 cents reported in the second quarter of 2012. The company posted a profit of $643 million in the reported quarter, up roughly 23% from $522 million recorded a year ago.
Sales came in at $2,144 million in the quarter, down 10.5% from $2,396 million registered a year ago and missed the Zacks Consensus Estimate of $2,230 million. Highly competitive markets impacted the results during the quarter.
Gross margin for the quarter declined 24% to $1 billion due to weak performance by all three nutrients.
Potash Corp. currently retains a Zacks Rank #5 (Strong Sell).