Potash misses by $0.03, beats on revs; narrows FY17 EPS (midpoint below consensus); also narrows potash sales volume guidance (19.67)
- Reports Q3 (Sep) earnings of $0.09 per share, excluding non-recurring items, $0.03 worse than the Capital IQ Consensus of $0.12; revenues rose 8.6% year/year to $1.23 bln vs the $1.03 bln Capital IQ Consensus.
- "Sales volumes for the quarter reached a record 2.9 million tonnes, increasing our total for the first nine months to 7.4 million tonnes."
- Gross margin was $230 million for the quarter and $753 million for the first nine months, exceeding 2016 levels of $190 million and $667 million, respectively, primarily due to higher potash contributions that more than offset weaker nitrogen and phosphate results.
- Co issues narrows guidance for FY17, sees EPS of $0.56-0.62 from $0.45-0.65 vs. $0.63 Capital IQ Consensus Estimate. Co sees Potash sales volumes of $9.1-9.3 mln tons versus prior guidance of 9.0-9.4 mln. EPS guidance excludes $0.08 in merger related costs.
- Outlook Details: "With greater clarity on potash markets through the balance of the year, we have narrowed our guidance range for potash sales volumes, to 9.1-9.3 million tonnes, and for gross margin, to $750-$800 million. In nitrogen, we expect markets to remain volatile in the fourth quarter and anticipate full-year gross margin will be significantly weaker than in 2016. In phosphate, we expect challenging market fundamentals will continue to weigh on our realizations. With these factors in mind, and taking into consideration the third-quarter phosphate impairment charge, we have lowered our combined nitrogen and phosphate gross margin range and now estimate $140-$190 million in 2017, trailing last year's combined total."