PotashCorp Earnings Impress Investors, Co. Notes "Greater Demand and Stability" in Q1

On Thursday, Potash Corp. of Saskatchewan, Inc. (NYSE: POT) reported first quarter earnings. Potash Corp President and Chief Executive Officer Bill Doyle commented, "After an especially challenging environment in the second half of 2013, greater demand and stability emerged early in the year. We saw strong customer engagement ahead of the spring planting season, particularly in potash. Despite weather-related issues that impacted our results, especially in phosphate, we were able to deliver earnings above our quarterly guidance range." Summary of First Quarter Results

• The company reported first quarter EPS of $0.40, or $340 million, versus the estimated $0.35. EPS were down 37 percent from the same quarter last year.
• Revenue came in at $1.68 billion versus the estimated $1.49 billion.
• PotashCorp reported cash provided by operating activities of $539 million.
• The company repurchased 11.7 million shares during the first quarter at an average price of $34.00 per share.
• Gross margin for the quarter came in at $565 million compared with the $867 million generated during the same quarter from last year.
• First quarter sales volume reached 1.6 million tonnes versus the 1.5 million tonnes sold in the 1Q13.
• The company's capital-related cash expenditures totaled $224 million for the quarter compared to $496 million during the same period last year.
• In the press release, PotashCorp reported "In nitrogen, first-quarter ammonia production in the US reached its highest level in more than a decade as additional capacity came online and producers responded to strong agricultural and industrial demand. While ammonia prices trailed the historically high levels of 2013 - a period characterized by especially strong demand and supply challenges in key producing regions - they moved up sharply as the quarter came to a close."

Company's Outlook

• Full-year 2014 guidance was adjusted to $1.50 to $1.80 per share.
• The company set the second quarter at $0.40 to $0.45 per share.
• PotashCorp maintained the view that global potash shipments could be within 55 and 57 million tonnes. Total shipments to North America for the full year could reach 9 to 9.5 million tonnes.
• The company increased the annual estimate for potash gross margin to $1.1- $1.3 billion and sales volume of 8.3-8.7 million tonnes.

Shares of PotashCorp closed at $35.43 on Thursday, up 8.25 percent.