SASKATOON – PotashCorp (TSX:POT) is lowering its profit estimate for the current year and planning to spend up to $2 billion to buy back some of its publicly traded stock, the Saskatchewan-based global fertilizer producer announced Thursday.
The Saskatoon-based company reported it had second-quarter earnings of $643 million, or 73 cents per diluted share, of net income compared to $522 million, or 60 cents per share in the same period a year ago.
The profit was below analyst estimates, which called for 81 cents per share of adjusted earnings or 79 cents per share of net income, according to data compiled by Thomson Reuters.
PotashCorp says the pace of global potash shipments remained “robust” during the quarter as buyers in all key markets actively purchased new supplies but prices were under competitive pressure.
As a result, the company is lowering its guidance for 2013 full-year earnings to a range between $2.45 and $2.70 per share, well below the previous guidance of $2.75-$3.25 per share.
It also estimated that it would have between 45 and 60 cents per share of earnings in the current quarter, which ends Sept. 30 – also below analyst estimates of 75 cents per share in adjusted earnings.
PotashCorp says its offshore investments in Jordan, Israel, Chile and China contributed $89 million during the quarter The market value of these investments amounted to approximately $6.8 billion, or $8 per PotashCorp share.
In North America, challenging spring planting affected fertilizer activity in some regions, but a late push by farmers to ensure the required nutrients were in place kept dealers busy throughout the quarter.
“Global fertilizer demand was strong during the quarter, but highly competitive markets around the world had an impact on our results,” said PotashCorp president and CEO Bill Doyle.
“Despite some weakening of prices in each of our nutrients, the continued engagement of buyers in our key markets was a positive sign.”
Potash sales reached 2.5 million tonnes in the second quarter and the average potash price declined to $356 per tonne from $433 over the same period last year primarily due to competition and spot market pricing.
PotashCorp also announced Thursday that its board of directors has approved a $2 billion share buyback program over a one-year period, subject to regulatory approval.
If the maximum number of shares are purchased, they would equal five per cent of the company`s outstanding common shares.
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