SASKATOON (dpa-AFX) - Weak fertilizer demand caused Potash Corp Of Saskatchewan Inc. (POT, POT.TO) to report lower first-quarter profit and cut its guidance. The results also missed analysts' estimates.
The company also said Thursday it saw demand turn around through the end of the quarter in the global potash market. It expects the acceleration in demand to continue through the remainder of the year.
In the first quarter, the fertilizer giant saw lower potash sales and production volumes, which resulted in higher costs, as buyers entered the year with the same cautious mindset they had in the prior year.
Bill Doyle, president and chief executive officer of the company said, 'Fertilizer buyers continued to move cautiously at the beginning of the year, especially with potash purchases, which impacted our performance during the quarter.'
Potash sales volumes declined to 1.2 million tonnes from 2.8 million tonnes sold in the previous year. Offshore shipments totaled 0.8 million tonnes, compared to 1.7 million tonnes a year ago. Shipments from North American producers declined 48 percent from last year.
In the first quarter, the company's net income dropped to $491 million or $0.56 per share from $732 million or $0.84 per share reported last year. On average, 26 analysts polled by Thomson Reuters expected earnings per share of $0.63 for the quarter. Analysts' estimates typically exclude one-time items.
Quarterly sales dropped to $1.75 billion from $2.20 billion a year earlier. Net sales were $1.64 billion, down from $2.06 billion in the same quarter last year, below analysts' estimate of $1.78 billion.
Looking ahead to the second quarter, the company expects earnings of $0.90 to $1.10 per share. Analysts anticipate earnings of $1.07 per share for the second quarter.
The company also lowered its full-year 2012 earnings per share guidance to a range of $3.20 to $3.60 from its prior view of $3.40 to $4.00. Analysts project 2012 earnings per share of $3.64.
POT closed Wednesday's regular trading at $44.28 on the NYSE. In the pre-market activity, the shares are down 2.44 percent.
POT.TO ended on Wednesday at C$43.65 on the Toronto Stock Exchange.
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