--> -3.55% pre open
Potash misses by $0.07, misses on revs; guides Q1 EPS below consensus; guides FY16 EPS below consensus; reduces dividend
- Reports Q4 (Dec) earnings of $0.24 per share, $0.07 worse than the Capital IQ Consensus of $0.31; revenues fell 28.8% year/year to $1.35 bln vs the $1.37 bln Capital IQ Consensus.
- Dividend cut: Quarterly dividend reduced by 34% to $0.25 per share
- Co announces indefinite suspension of Picadilly, New Brunswick potash operation in January 2016
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Market conditions:
- Global potash shipments for the fourth quarter remained relatively flat compared to 2014, with increased deliveries to China offsetting slightly weaker demand in most other markets.
- Nitrogen markets continued to feel the effects of falling energy prices. Lower production costs in key producing regions increased competitive supply, which -- combined with a weaker-than-normal fall application season in the US and slower demand in Brazil -- caused prices for nearly all nitrogen products to trend lower during the quarter.
- In phosphate, record Chinese exports, seasonally slow demand in India and the US and continued caution in Brazil weighed on prices for solid fertilizers. Prices for feed, industrial, and liquid fertilizer products were more resilient, supported by strong demand and tighter supply.
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Guidance:
- Co issues downside guidance for Q1, sees EPS of $0.10-0.20 vs. $0.29 Capital IQ Consensus Estimate.
- Co issues downside guidance for FY16, sees EPS of $0.90-1.20 vs. $1.45 Capital IQ Consensus Estimate.
- Co anticipates 2016 potash sales volumes will be in the range of 8.3-9.1 million tonnes.
- Commentary: "Weaker fertilizer prices late in the year reduced our earnings for the quarter, giving rise to a more cautious outlook for all three nutrients as we begin 2016..."