| Will Potash Corp. (POT) Disappoint Q3 Earnings Estimates? | |
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Potash Corp. of Saskatchewan, Inc. POT is set to release third-quarter 2015 results before the opening bell on Oct 29.
In the last quarter, the fertilizer giant had delivered a negative earnings surprise of roughly 3.85%. The company’s profits declined around 12% in the quarter owing to weak nitrogen pricing. Earnings also missed the Zacks Consensus Estimate.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Potash Corp. trimmed the upper end of its full-year 2015 earnings guidance range, factoring in a decline in specific spot market prices for potash, along with expectations of a more subdued nitrogen market as well as weaker pricing. The company narrowed its full-year sales volume expectations for potash to 9.3–9.6 million (from 9.2–9.7 million tons) and the higher end of its potash gross margin guidance range to $1.5–$1.7 billion (from $1.5–$1.8 billion).
In early Oct 2015, the company withdrew its proposal to purchase Germany-based K+S Aktiengesellschaft. The private proposal could assemble complementary assets of both companies, providing a boost to the combined company’s financial resources and benefit its shareholders through product as well as geographic diversification. However, per Potash Corp., challenging market conditions have led the global commodity and equity markets to contract considerably. These factors resulted in the withdrawal of the offer.
Further, Potash Corp. sees challenges in the near future as uncertain economic growth prospects in many developing markets have resulted in increased volatility in equity and currency markets around the globe. These headwinds, along with lower fertilizer prices, make the short-term outlook challenging. However, the company anticipates higher potash consumption trends in the markets of China and India in the long run.
Potash Corp. also remains affected by macroeconomic uncertainties and is exposed to other issues such as price volatility and currency exchange rate fluctuations. Moreover, an expected reduction in planted acres for corn in North America, coupled with depressed crop pricing, has created an uncertainty regarding potash consumption in 2015.
Moreover, the company remains exposed to a volatile pricing environment. Potash pricing is expected to remain under pressure moving ahead. Higher supply, reduced global energy prices and relatively softer agricultural fundamentals are also expected to contribute to a more tempered nitrogen pricing environment this year.
Earnings Whispers
Our proven model shows that Potash Corp. is likely to miss earnings estimates this quarter. This is because the stock has a negative Earnings ESP and a Zacks Rank #5 (Strong Sell).
Zacks ESP: Earnings ESP for Potash Corp. is currently pegged at -2.63%. This is because the Most Accurate estimate is pegged at 37 cents, while the Zacks Consensus Estimate stands at 38 cents.
Zacks Rank: Potash Corp.’s Zacks Rank #5, when combined with a negative ESP, indicates an earnings miss. We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the basic materials sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Golden Star Resources, Ltd. GSS has an Earnings ESP of +14.29% and a Zacks Rank #3 (Hold).
Fibria Celulose S.A. FBR has an Earnings ESP of +10.53% and a Zacks Rank #2 (Buy).
Koppers Holdings Inc. KOP has an Earnings ESP of +3.08% and a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report POTASH SASK (POT): Free Stock Analysis Report KOPPERS HOLDNGS (KOP): Free Stock Analysis Report FIBRIA CELULOSE (FBR): Free Stock Analysis Report GOLDEN STAR RES (GSS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Potash Corporation of Saskatchewan Inc.
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CODE : POT.TO |
ISIN : CA73755L1076 |
CUSIP : 73755L1076 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Potash Corp. est une société de production minière basée au Canada. Potash Corp. est cotée au Canada. Sa capitalisation boursière aujourd'hui est 21,7 milliards CA$ (17,2 milliards US$, 14,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 24 mars 1995 à 10,00 CA$, et son plus haut niveau récent le 21 septembre 2007 à 99,07 CA$. Potash Corp. possède 840 009 984 actions en circulation. |