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Potash Corp (POT) Tops Earnings & Revenues Estimates in Q1
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Potash Corp. posted a profit of $149 million or 18 cents per share in first-quarter 2017, up 98.7% from $75 million or 9 cents per share it earned a year ago. Earnings per share for the reported quarter beat the Zacks Consensus Estimate of 10 cents.
Net sales (as adjusted) for the quarter declined 9% year over year to $979 million, but surpassed the Zacks Consensus Estimate of $928 million.
Segment Review
Potash: Potash gross margin was $160 million in the reported quarter, up from $88 million in the year-ago period due to higher offshore sales volumes and reduced per ton costs, which more than offset lower offshore netbacks. Sales volumes for the segment were 2.2 million tons, up 22.2% year over year. Average realized potash price was $166 per ton, down from the year-ago quarter figure of $178. This decline is due to the result of weaker prices in standard-grade markets more than offsetting higher prices in North America.
Nitrogen: Gross margin was $97 million in the reported quarter, down from $107 million in the year-ago quarter due to weaker prices and slightly lower sales volumes. Sales volumes for the quarter were 1.6 million tons, down 6% due to lower industrial demand and seasonal weakness for nitrogen solutions. Average realized price of $229 per ton during the quarter was down from the year-ago quarter figure of $244. The decline was due to increased global supply weighed on benchmark pricing for all products.
Phosphate: Sales volumes dipped 0.6 million tons from the year-ago figure of 0.7 million tons due to weaker demand for liquid fertilizer products. Gross margin of $11 million for the quarter was significantly lower than the $39 million in the year ago quarter. Average realized phosphate price for the quarter was $423 per ton, down from $499 per ton recorded in the year-ago period, owing to lower benchmark pricing of all products.
Potash Corporation of Saskatchewan Inc. Price, Consensus and EPS Surprise
Potash Corp.’s cash and cash equivalents were $62 million as of Mar 31, 2017 compared with $74 million as of Mar 31, 2016. As of Mar 31, 2016, long-term debt was $3,707 million at par with the year-ago figure.
Guidance
Potash Corp. expects full-year 2017 earnings in the range of 45 cents–65 cents per share that includes merger related charges of 5 cents per share. The company expects total potash sales volume in the range of 8.9–9.4 million tons in 2017. It projects potash gross margin of $600-$800 million for the year.
Capital expenditures for the year are projected at $600 million.
Potash Corp. expects combined gross margin for nitrogen and phosphate in the band of $150–$400 million for 2017.
The company expects effective income tax rate in the range of 2–5% and selling and administrative expenses in the range of $220 million–$230 million for 2017.
Price Performance
Potash Corp. underperformed the Zacks categorized Fertilizers industry over the past six months. While the company’s shares rose 4.6% over this period, the industry recorded a gain of 8.4%.
Zacks Rank & Key Picks
Potash Corp. currently carries a Zacks Rank #3 (Hold).
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Potash Corp (POT) Tops Earnings & Revenues Estimates in Q1
Potash Corp. posted a profit of $149 million or 18 cents per share in first-quarter 2017, up 98.7% from $75 million or 9 cents per share it earned a year ago. Earnings per share for the reported quarter beat the Zacks Consensus Estimate of 10 cents.
Net sales (as adjusted) for the quarter declined 9% year over year to $979 million, but surpassed the Zacks Consensus Estimate of $928 million.
Segment Review
Potash: Potash gross margin was $160 million in the reported quarter, up from $88 million in the year-ago period due to higher offshore sales volumes and reduced per ton costs, which more than offset lower offshore netbacks. Sales volumes for the segment were 2.2 million tons, up 22.2% year over year. Average realized potash price was $166 per ton, down from the year-ago quarter figure of $178. This decline is due to the result of weaker prices in standard-grade markets more than offsetting higher prices in North America.
Nitrogen: Gross margin was $97 million in the reported quarter, down from $107 million in the year-ago quarter due to weaker prices and slightly lower sales volumes. Sales volumes for the quarter were 1.6 million tons, down 6% due to lower industrial demand and seasonal weakness for nitrogen solutions. Average realized price of $229 per ton during the quarter was down from the year-ago quarter figure of $244. The decline was due to increased global supply weighed on benchmark pricing for all products.
Phosphate: Sales volumes dipped 0.6 million tons from the year-ago figure of 0.7 million tons due to weaker demand for liquid fertilizer products. Gross margin of $11 million for the quarter was significantly lower than the $39 million in the year ago quarter. Average realized phosphate price for the quarter was $423 per ton, down from $499 per ton recorded in the year-ago period, owing to lower benchmark pricing of all products.
Potash Corporation of Saskatchewan Inc. Price, Consensus and EPS Surprise
Potash Corporation of Saskatchewan Inc. Price, Consensus and EPS Surprise | Potash Corporation of Saskatchewan Inc. Quote
Financials
Potash Corp.’s cash and cash equivalents were $62 million as of Mar 31, 2017 compared with $74 million as of Mar 31, 2016. As of Mar 31, 2016, long-term debt was $3,707 million at par with the year-ago figure.
Guidance
Potash Corp. expects full-year 2017 earnings in the range of 45 cents–65 cents per share that includes merger related charges of 5 cents per share. The company expects total potash sales volume in the range of 8.9–9.4 million tons in 2017. It projects potash gross margin of $600-$800 million for the year.
Capital expenditures for the year are projected at $600 million.
Potash Corp. expects combined gross margin for nitrogen and phosphate in the band of $150–$400 million for 2017.
The company expects effective income tax rate in the range of 2–5% and selling and administrative expenses in the range of $220 million–$230 million for 2017.
Price Performance
Potash Corp. underperformed the Zacks categorized Fertilizers industry over the past six months. While the company’s shares rose 4.6% over this period, the industry recorded a gain of 8.4%.
Zacks Rank & Key Picks
Potash Corp. currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include Univar Inc. , The Chemours Company (CC - Free Report) and Kronos Worldwide Inc (KRO - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Univar has expected long-term growth of 9.4%.
Chemours has expected long-term growth of 15.5%.
Kronos has expected long-term growth of 5%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>