SASKATOON – Potash Corp. (TSX:POT) says its fourth-quarter profit fell to US$421 million, or 48 cents per share – missing analyst estimates by nine cents a share.
The result includes a US$41-million charge related to the settlement of antitrust claims in the United States as well as substantially lower revenue as customers delayed their buying decisions amid economic uncertainty.
The fourth-quarter profit, reported in U.S. currency, was down from $683 million, or 78 cents per diluted share of net earnings, in the same three-month period a year earlier.
Revenue for the quarter was $1.64 billion, down from $1.86 billion a year earlier, and also below analyst estimates compiled by Thomson Reuters.
The consensus estimate was for 57 cents per share of net income and $1.8 billion of revenue in the three-month period ended Dec. 31.
PotashCorp also provided earnings estimates for the first quarter of 2013 and the full year, calling for between 50 and 65 cents per share in the three months ending March 31 and between $2.75-$3.25 per share for full year ending Dec. 31.
The consensus estimate has been for 64 cents per share of earnings in the first quarter and $3.27 per share of net earnings, or $3.19 of adjusted earnings.
On Wednesday, PotashCorp announced it will raise the quarterly dividend to shareholders to 28 cents per share, up 33 per cent or seven cents per share from the previous rate.
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It was also one of three companies – Along with Calgary-based Agrium (TSX:AGU) and Minnesota-based Mosaic Co. (NYSE:MOS) to announce they would each pay $43.75 million to settle U.S. antitrust suits filed in 2008.
The three fertilizer companies deny any wrongdoing and say they decided to settle to avoid the cost and distraction of a protracted legal fight.
The Saskatoon-based potash producer said Thursday its full-year earnings for 2012 were $1.2 billion, or $2.37 per share. That included a second-quarter $341-million writedown related to its investment in Sinofert Holdings Ltd. in China.
The 2012 profit was down substantially from 2011, when PotashCorp’s net income was $3.1 billion or $3.51 per share.
The company says its offshore investments in Jordan, Israel and Chile contributed $94 million to earnings in the fourth quarter of 2012. For the full year, contributions from these investments – and a dividend from Sinofert – reached a record $412 million.
Potash Corp. says the typical late-season slowdown in global potash demand was more pronounced in the quarter as buyers awaited clarity on their contracts before committing to new supplies. Shipments to offshore markets declined 43 per cent in the quarter from the same period last year. In contrast, quarterly domestic shipments outpaced those of the previous year by 38 per cent.
“Our fourth-quarter results were adversely affected by weaker performance in all three nutrients as global fertilizer markets paused in the absence of significant immediate needs and amid lack of direction, particularly in phosphate and potash,” said PotashCorp president and CEO Bill Doyle.
“Despite these temporary challenges, we operated with a consistent approach – temporarily slowing potash production and leveraging our diversified product mix in our other nutrients – to best position our company for the expected rebound in fertilizer demand in 2013.”
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