Potash Corp. (POT) +2.8% premarket after posting big Y/Y declines in Q2 earnings and revenues, but results beat expectations and POT raised its earnings guidance for the year.
POT says its H2 outlook has improved after record H1 demand, prompting it to raise its global potash shipment expectations to 56.5M-58M metric tons.
Issues upside guidance for FY 2014, now seeing EPS of $1.70-$1.90 from its previous view of $1.50-$1.80 and $1.67 analyst consensus estimate; expects Q3 EPS of $0.35-$0.45 vs. $0.40 consensus.
Says it remains on track to achieve its 2014 target of reducing per-ton cash costs by $15-$20 from 2013 levels, although Q3 will reflect normal seasonal increases as required maintenance downtime is completed.
In Q2, POT says stronger performances from all three of its key nutrient segments improved, lower potash and nitrogen prices have rekindled demand, and cost efficiencies are helping the bottom line.
Q2 gross margin fell to $747M from $979M in the year-ago period, with potash gross margin falling 36%; average potash prices were $263/metric ton, down from $356/ton from a year ago but up from $250 in Q1.
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