Canadian fertilizer giant Potash Corp. of Saskatchewan, Inc. (POT,POT.TO) reported Thursday a profit for the fourth quarter that surged from last year, boosted sales growth and improved margins amid contributions from all three nutrient segments. Both earnings per share and quarterly sales topped analysts' expectations.
The world's largest maker of crop nutrients also provided earnings forecast for the first quarter, and full-year 2015, both in line with Street view.
"Record potash sales volumes, combined with higher realizations across all three nutrients, raised our quarterly earnings near the upper end of our guidance range," President and CEO Jochen Tilk said.
The Saskatoon company reported net income of $407 million or $0.49 per share for the fourth quarter, sharply higher than $230 million or $0.26 per share in the prior-year quarter.
On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that its investments in Arab Potash Co. (APC) in Jordan, Israel Chemicals Ltd. (ICL) in Israel and Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile contributed $31 million to quarterly earnings, exceeding the $25 million in fourth-quarter 2013.
Sales for the quarter surged to $1.90 billion from $1.54 billion in the same quarter last year, and topped twelve Wall Street analysts' consensus estimate of $1.67 billion.
Gross profit for the quarter surged to $746 million from $460 million in the year-ago quarter, driven by improved contributions from all three nutrient segments.
Segment-wise, Potash sales volume grew 42 percent to a record 2.5 million tonnes in the quarter, including offshore sales volumes of 1.67 million tones. North American volumes edged down to 0.83 million tonnes from 0.84 million tonnes. Average realized price was relatively flat with last year at $284 per tonne.
Phosphate sales volumes decreased to 0.79 million tones from 0.93 million tonnes, and average realized phosphate price rose 16 percent to $528 per tonne from last year.
Nitrogen's sales volumes were relatively flat at 1.5 million tonnes, and its average realized price grew 24 percent to $405 per tonne, with ammonia price rising 31 percent.
Looking ahead to the first quarter, the company expects earnings in a range of about $0.45 to $0.55 per share. Analysts expect the company to earn $0.50 per share for the quarter.
For fiscal 2015, Potash Corp projects earnings in the range of $1.90 to $2.20 per share. Street is currently looking for full-year 2015 earnings of $2.12 per share.
Based on the company's capability and outlook for 2015, the company estimates annual potash sales volumes of 9.2 million to 9.7 million tonnes.
"As we look ahead, we see a supportive market environment - most notably in potash. We are ready to respond should demand for this nutrient prove stronger than expected and, as we balance operational flexibility with efficiencies, we believe PotashCorp is well positioned should conditions be more challenging," Tilk Added.
POT closed Wednesday's regular trading session at $36.20, down $0.23 on a volume of 5.10 million shares. Meanwhile, POT.TO is trading on the TSX at C$45.36, up C$0.14 on a volume of 1.79 million shares.
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