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A Potash Corp. operation. (Handout)
A Potash Corp. operation. (Handout)

Potash Corp. cuts profit forecast on ‘market uncertainty’ Add to ...

Potash Corp. of Saskatchewan Inc. is cutting its profit forecast as buyers continue to defer purchases in an uncertain market.

The global crop nutrient company warned late on Thursday that third-quarter earnings would come in at about 41 cents per share, down from the 45-to-60-cents it forecast in July.

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The downgrade reflects a potash market in turmoil in the wake of the decision by OAO Uralkali a few months ago to quit a joint trading venture with its Belarusian rival and to plan on boosting output.

Shares in fertilizer companies plunged on the news.

Potash’s “revised guidance reflects the acute market uncertainty and lingering turmoil battering global potash markets,” Raymond James analyst Steve Hansen said in a research note Friday.

“Specifically, with potash prices moving sharply lower across most export regions, buyers seem intent on deferring purchases with the hope of securing lower prices and improved macro visibility in the future.”

Mr. Hansen points out that potash “bellwethers” Mosaic and Agrium both recently lowered their 2013 global shipment forecasts.

Potash’s stock is down about 30 per cent since the Uralkali decision at the end of July.

“The change [in third-quarter outlook] primarily reflects lower than forecasted potash sales volumes late in the quarter as buyers continued to defer significant purchases amidst near-term market uncertainty,” Potash said in a news release.

The company said further discussion regarding third-quarter results and full-year guidance will take place in its third-quarter news release and conference call on Oct. 24.

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