Israel Chemicals Drops on Quarter Profit Outlook: Tel Aviv Mover

Israel Chemicals Ltd. (ICL) dropped to the lowest level in a week on bets fourth quarter results will be weak as Potash Corp. of Saskatchewan Inc. reported a quarterly profit that missed estimates.

The shares of the company that extracts minerals from the Dead Sea to make potash and fertilizers declined 1.4 percent to 49.14 shekels, the lowest level since Jan. 21, at the close in Tel Aviv. The benchmark TA-25 Index declined 0.1 percent while Israel Corp. (ILCO), which holds a 52.3 percent stake in Israel Chemicals, fell 2.2 percent to 2,532 shekels.

Potash Corp.,the world’s largest fertilizer producer, said fourth-quarter profit excluding a provision for legal costs was 52 cents a share, missing the 57-cent average of 27 estimates. Fertilizer producers have seen export volumes slump in the past year after China and India held off from signing new sales contracts.

“ICL is down because of a knock-on effect of Potash Corp.,” Gilad Alper, a senior analyst at Excellence Nessuah said today by phone. “The company is expected to report very poor fourth quarter numbers because of the delay in the China and India contracts.”

Israel Chemicals is expected to report sales of $1.43 billion in the fourth quarter and income of $227.5 million, according to a mean estimate of three analysts in data compiled by Bloomberg. This compares to sales of $1.7 billion and net income of $369.6 million in the fourth quarter of 2011.

Potash Corp. and its two biggest North American competitors, Agrium Inc. (AGU) and Mosaic Co. (MOS), said last month they agreed to sell 1 million tons of potash to China for $70 a ton less than the previous accord, which expired at the end of June. Israel Chemicals said earlier this month it signed an agreement with China to supply 660,000 metric tons of potash in first half of this year as part of a 3.3 million ton multi year contract. No deal has been reached with Indian buyers.

Potash Corp. held talks in October with the Israeli government about increasing its stake in Israel Chemicals from 13.84 percent. Nine analysts recommend investors buy Israel Chemicals shares, eight say hold, according to data compiled by Bloomberg.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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