Road-Salt Miner Compass Cuts Profit Forecast on Mild Winter

  • Lowers full-year earnings outlook, cuts jobs at Canada mine
  • Fourth quarter has least snow in a decade, Monness Crespi says

While the U.S. enjoys unseasonably mild winter weather, the warm temperatures and lack of snow are bad news for deicing-salt producer Compass Minerals International Inc.

The company said Tuesday its full-year earnings per share will now be less than the low end of its October forecast of $5.20 to $5.50. The average of eight analysts’ estimates compiled by Bloomberg is for $5.38.

Compass is curbing production at its Goderich mine in Ontario and reducing the number of employees there by about 90, the Overland Park, Kansas-based company said in a statement. It also cited weak demand for its plant-nutrition products.

The fourth quarter has been the least snowy in at least a decade, according to Chris Shaw, an analyst at Monness Crespi Hardt & Co., who said in Monday in a note that he was cutting his share-price target for Compass to $68 from $75. The second week of December was the hottest for that period in North America in more than half a century, according to weather data provider Planalytics Inc.

“We also now expect significant volume declines for 1Q, unless unusually high snowfall occurs at the beginning of the quarter,” said Shaw, who has a sell rating on the stock.

Compass fell 2.2 percent to $70.52 at 8:19 a.m. before the start of regular trading in New York. The shares have fallen 14 percent this month through Monday’s close.

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