Seeking Alpha

Potash -4.3% as challenging fertilizer market conditions hit Q4 results

  • Potash (POT) -4.3% premarket after posting a 45% drop in Q4 earnings and issuing weaker than expected earnings guidance for 2014 on expectations for continued pricing pressure.
  • Gross margins fell as lower prices for all three fertilizer nutrients - potash, nitrogen and phosphate - outweighed improved costs and higher sales volumes.
  • In its downside guidance, POT sees Q1 EPS of $0.30-$0.35 vs. $0.46 analyst consensus, and sees FY 2014 EPS of $1.40-$1.80 vs. $2.01 consensus.
  • Q4 potash sales volumes rose 13%, largely fueled by North American activity, but average potash prices fell to $282/metric ton in the quarter from $387 a year earlier; while POT near-term pressure on potash prices appears to have subsided, "its impact is expected to suppress our offshore realizations through the early part of 2014."
  • Among peers: MOS -1.2%, IPI -2.1% premarket.

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Comments (6)
  • doc47
    , contributor
    Comments (1279) | Send Message
     
    I repeat: Use covered calls or get out. This isn't changing for a while.
    30 Jan 2014, 09:23 AM Reply Like
  • Michael Reilly
    , contributor
    Comments (16) | Send Message
     
    I'm sure Putin will decide the fate of the potash cartel once the Olympics are over - keep POT on the radar in the meantime
    30 Jan 2014, 10:08 AM Reply Like
  • 11146471
    , contributor
    Comments (1127) | Send Message
     
    Year 2014 will be the one of Russian producers when it comes to potash...long Uralkaliy (URKA)!

     

    Weak rubble and cheap raw material and labour helps them a lot
    30 Jan 2014, 11:08 AM Reply Like
  • siempre1
    , contributor
    Comments (27) | Send Message
     
    They keep playing up the 45% as though this is something the market didn't already compensate for MANY months ago. The only news here is that they were off by 2 cents on their EPS estimates. I don't really see that as earthshattering.
    31 Jan 2014, 06:09 AM Reply Like
  • burtsmet
    , contributor
    Comments (8) | Send Message
     
    what is the real price of pot. ????
    31 Jan 2014, 01:47 PM Reply Like
  • 11146471
    , contributor
    Comments (1127) | Send Message
     
    Uralkaliy sells at 305$/mT to the Chinese.
    The cost of the raw material depends and is different form company to company.
    At the lowest end are Uralkaliy and Phosagro of Russia and the at the high end are Israel Chemicals, K+S of Germany and Intrepid of USA. Canadian POT and AGU are mid cost producers.
    The most efficient overall are POT and K+S.
    Russian providers are not very efficient but the have the big advantage of low cost (raw material and labor), close distance from China (which is the largest importer globally), weak rubble and governmental support
    31 Jan 2014, 03:32 PM Reply Like
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