Back to top

Analyst Blog

On March 19, Zacks Investment Research downgraded fertilizer company Potash Corp. of Saskatchewan, Inc. (POT - Analyst Report) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Potash Corp. posted tepid fourth-quarter 2013 results on Jan 30. Its profit for the quarter slid roughly 45% year over year, hurt by severance-related charges and lower pricing across all three nutrients – potash, nitrogen and phosphate.

Adjusted earnings of 31 cents per share fell short of the Zacks Consensus Estimate by a couple of cents. Revenues fell roughly 6% year over year to $1,541 million, but surpassed the Zacks Consensus Estimate of $1,388 million. Revenues fell as higher sales volume was more than neutralized by lower pricing.

Earnings estimates for Potash Corp. are on the downswing following the release of the fourth quarter results. The Zacks Consensus Estimate for 2014 has gone down 20.5% to $1.63 per share as most of the estimates were revised downward. The Zacks Consensus Estimate for 2015 has also declined 10.3% to $2.00.

While Potash Corp. will benefit from strong geographic diversification and expanded operational capability in potash, it remains exposed to volatility in potash and phosphate pricing.

Average realized potash price fell roughly 27% year over year in the fourth quarter, hit by competitive pressure across all markets. Pricing pressure was also witnessed across Nitrogen and Phosphate segments. These challenges may sustain in the near term.

Moreover, demand for potash and phosphate remains somewhat weak in India, a key market. Indian government’s move to trim potash subsidy levels coupled with local currency devaluation is affecting demand in that country. A material recovery in demand is not expected in the short term.

Other Stocks to Consider

Other companies in the broader basic materials sector with favorable Zacks Rank are Methanex Corporation (MEOH - Analyst Report), Cytec Industries Inc. (CYT - Snapshot Report) and The Dow Chemical Company (DOW - Analyst Report), all with a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%