We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Potash Corp. (POT) Earnings Beat & Revenues Miss in Q3
Read MoreHide Full Article
Potash Corp. posted a profit of $81 million or 10 cents per share in third-quarter 2016, declining roughly 71.3% from $282 million or 34 cents per share earned a year ago. Earnings as adjusted, excluding one-time items, came in at 11 cents per share and surpassed the Zacks Consensus Estimate of 9 cents.
Revenues for the quarter slumped 29.9% year over year to $982 million and missed the Zacks Consensus Estimate of $1,004 million.
Segment Review
Potash: Potash gross margin was $106 million in the reported quarter, down from $294 million in the year-ago quarter due to weak pricing environment. Sales volumes for the segment were 2.5 million tons, rising 16% year over year. Average realized potash price was $150 per ton, down from $250 per ton in the year-ago quarter, owing to the significant price decline in first-half 2016.
Nitrogen: Sales volumes for the quarter were 1.6 million tons, climbing 8% from the year-ago quarter due to increased production at the company’s expanded Lima facility. Second-quarter gross margin was $69 million, 57% lower than the year-ago quarter. Average realized price for nitrogen products fell to $200 per ton from $319 per ton a year ago, due to weaker benchmark pricing.
Phosphate: Sales volumes were 0.8 million, were almost flat compared with the year-ago quarter. Gross margin was $15 million, down from $50 million in the year-ago quarter.
Average realized phosphate price for the quarter was $385 per ton, down from $538 per ton in the prior-year quarter as prices for all products decreased mainly liquid fertilizers.
Financials
Potash Corp.’s cash and cash equivalents were $153 million as of Sep 30, 2016 compared with $73 million as of Jun 30, 2015. Long-term debt was $3,714 million as of Sep 30, 2016 compared with $3,709 million as of Jun 30, 2015.
Merger
During the quarter Potash Corp. announced a merger of equals with Agrium Inc. to create a world-class integrated global supplier of crop inputs. The company believes that this transaction will generate considerable value for its shareholders, provide various ways for growth and increase its financial flexibility.
Guidance
Potash Corp. narrowed the guidance range for its potash sales volumes to 8.5 million–8.7 million tons and refined gross margin outlook to $400–$500 million.
The company also tightened the gross margin guidance range for nitrogen and phosphate in the range of $400–$450 million.
The company cut its estimate for effective income tax rate to a range of 14–16%, due to lower earnings and a higher proportion of income from lower-tax jurisdictions. Further, the company tightened the outlook for selling and administrative expenses to the range of $215 million–$225 million due to lower expected corporate expenses associated with reduced earnings.
Additionally, the company narrowed its earnings guidance for 2016 to the range of 40 cents to 45 cents per share, which includes first-half notable charges of 11 cents per share mainly related to the suspension of its Picadilly mine in New Brunswick and share of Canpotex's Prince Rupert project exit costs.
Newmont has an expected earnings growth rate of 82.8% for the current year.
New Gold has an expected earnings growth rate of 416.7% for the current year.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Potash Corp. (POT) Earnings Beat & Revenues Miss in Q3
Potash Corp. posted a profit of $81 million or 10 cents per share in third-quarter 2016, declining roughly 71.3% from $282 million or 34 cents per share earned a year ago. Earnings as adjusted, excluding one-time items, came in at 11 cents per share and surpassed the Zacks Consensus Estimate of 9 cents.
Revenues for the quarter slumped 29.9% year over year to $982 million and missed the Zacks Consensus Estimate of $1,004 million.
Segment Review
Potash: Potash gross margin was $106 million in the reported quarter, down from $294 million in the year-ago quarter due to weak pricing environment. Sales volumes for the segment were 2.5 million tons, rising 16% year over year. Average realized potash price was $150 per ton, down from $250 per ton in the year-ago quarter, owing to the significant price decline in first-half 2016.
Nitrogen: Sales volumes for the quarter were 1.6 million tons, climbing 8% from the year-ago quarter due to increased production at the company’s expanded Lima facility. Second-quarter gross margin was $69 million, 57% lower than the year-ago quarter. Average realized price for nitrogen products fell to $200 per ton from $319 per ton a year ago, due to weaker benchmark pricing.
Phosphate: Sales volumes were 0.8 million, were almost flat compared with the year-ago quarter. Gross margin was $15 million, down from $50 million in the year-ago quarter.
Average realized phosphate price for the quarter was $385 per ton, down from $538 per ton in the prior-year quarter as prices for all products decreased mainly liquid fertilizers.
Financials
Potash Corp.’s cash and cash equivalents were $153 million as of Sep 30, 2016 compared with $73 million as of Jun 30, 2015. Long-term debt was $3,714 million as of Sep 30, 2016 compared with $3,709 million as of Jun 30, 2015.
Merger
During the quarter Potash Corp. announced a merger of equals with Agrium Inc. to create a world-class integrated global supplier of crop inputs. The company believes that this transaction will generate considerable value for its shareholders, provide various ways for growth and increase its financial flexibility.
Guidance
Potash Corp. narrowed the guidance range for its potash sales volumes to 8.5 million–8.7 million tons and refined gross margin outlook to $400–$500 million.
The company also tightened the gross margin guidance range for nitrogen and phosphate in the range of $400–$450 million.
The company cut its estimate for effective income tax rate to a range of 14–16%, due to lower earnings and a higher proportion of income from lower-tax jurisdictions. Further, the company tightened the outlook for selling and administrative expenses to the range of $215 million–$225 million due to lower expected corporate expenses associated with reduced earnings.
Additionally, the company narrowed its earnings guidance for 2016 to the range of 40 cents to 45 cents per share, which includes first-half notable charges of 11 cents per share mainly related to the suspension of its Picadilly mine in New Brunswick and share of Canpotex's Prince Rupert project exit costs.
POTASH SASK Price, Consensus and EPS Surprise
POTASH SASK Price, Consensus and EPS Surprise | POTASH SASK Quote
Zacks Rank
Potash Corp. currently holds a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space include Newmont Mining Corporation (NEM - Free Report) and New Gold Inc. (NGD - Free Report) both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Newmont has an expected earnings growth rate of 82.8% for the current year.
New Gold has an expected earnings growth rate of 416.7% for the current year.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>