Potash Corp of Saskatchewan Inc., North America’s largest fertilizer producer, cut its profit forecast after customers deferred purchases amid predictions that prices for the crop nutrient will slump.
Third-quarter earnings will be about 41 cents a share, the Saskatoon, Saskatchewan-based company said today in a statement. In July, it predicted profit of 45 to 60 cents. The average of 27 analysts’ estimates compiled by Bloomberg was for 47 cents, excluding one-time items.
“The change primarily reflects lower-than-foretasted potash sales volumes late in the quarter as buyers continued to defer significant purchases amidst near-term market uncertainty,” the company said in the statement.
The global potash market was shaken at the end of July after OAO Uralkali, the world’s largest producer, exited a trading joint venture with its Belarussian rival. The Russian company said it would boost output and start selling at lower prices, a move that sent shares of fertilizer companies plunging around the world.
Uralkali CEO Vladislav Baumgertner said at the time that the price of potash, which helps strengthen plant roots and improve resistance to drought, may fall to less than $300 a ton as his company moves to full production to gain market share. The last reported potash supply agreement between the Uralkali-Belarussin venture and China was at $400 a ton.
Potash Corp. dropped 2.8 percent to $30.85 at 7:03 p.m. in New York after the end of regular trading. The company is scheduled to report third-quarter earnings on Oct. 24.
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