POT 78.49 down 2.50 misses on revs and guides below concensus
:10AM Potash beats by $0.16, misses on revs; guides Q2 EPS below consensus; lowers FY09 EPS below consensus (POT) 80.99 : Reports Q1 (Mar) earnings of $1.02 per share, $0.16 better than the First Call consensus of $0.86; revenues fell 51.2% year/year to $922.5 mln vs the $975.5 mln consensus. Co issues downside guidance for Q2, sees EPS of $1.10-1.50 vs. $2.21 consensus. Co lowers guidance for FY09, sees EPS of $7.00-8.00 vs. $9.65 consensus, down from $10.00-12.00. Co said, "The first quarter demonstrated the benefits of our potash strategy of matching supply to market demand, as well as our ability to remain profitable even during periods of demand deferral... While buyers have delayed purchases since the fourth quarter of 2008, the need for potash and other fertilizers cannot be denied. The fundamentals of our business remain extremely favorable, with historically low global grain stocks, supportive crop prices, depleting customer potash inventories and expectations of tight potash supply/demand dynamics for at least the next five years." Potash movement was extremely slow in the first quarter as all major offshore markets destocked inventories and many buyers waited for the outcomes of contract negotiations with China and India. By the end of the quarter, Brazil and Southeast Asian customers had worked through significant portions of their inventories and gradually began placing new orders at spot market prices of approximately $750 per tonne, comparable to spot prices before the financial downturn. A sharp decline in sales volumes significantly impacted first-quarter potash gross margin, which fell to $166.6 million from $514.6 million in the same quarter of 2008. Sales volumes to North American customers declined 86 percent, while offshore volumes fell 78 percent. Only 0.5 million tonnes were sold in the quarter, compared to 2.5 million tonnes in first-quarter 2008.
AI
