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Potash doubles 4Q profit, will split stock

Potash doubles 4Q profit, will split stock

Potash Corp. of Saskatchewan Inc. said Thursday that strong demand for fertilizer helped it double fourth-quarter earnings.
Potash Corp., the world's biggest producer of the plant nutrient used in fertilizer, boosted its prediction for 2011 earnings, raised its dividend and announced a 3-for-1 stock split.
The company said it earned $482.3 million, or $1.61 per share, compared with $239.2 million, or 79 cents per share, a year earlier. Per share results are on a pre-split basis.
Potash Corp. said spending to answer takeover threats cut earnings by 16 cents per share. BHP Billiton Ltd. withdrew a $38.6 billion takeover bid in November after it failed to convince the Canadian government to drop opposition to a sale. Canada rejected the offer on the grounds it did not provide a net-benefit to the country.
Revenue rose to $1.81 billion from $1.10 billion. Analysts expected the company to earn $1.68 per share on revenue of $1.66 billion, according to FactSet.
The Canada-based company said growing global food demand would boost its potential to sell products that replace depleted soil nutrients and boost farmland production. It predicted first-quarter earnings between $2.10 and $2.70 per share, and full-year income of $8.40 to $9.60 per share.
Analysts expect $2.19 per share in the first quarter and $8.82 per share for the year.
The company said it has raised its 2011 potash sales expectations to between 9.5 million and 10 million tons for the year, saying that would make it a record year. The fertilizer giant also said it is currently in negotiations with India, one of the world's most populous countries.
"We believe no company in our industry is better positioned to benefit from the exceptional agricultural markets that we see in the years ahead," chief executive Bill Doyle told a conference call with financial analysts.
"While the global recession created short-term fluctuations in the agricultural world, food demand did not waver. In our view the drivers of our business are more powerful today than ever before."
Doyle noted price increases for potash announced during the last quarter have stuck.
"And we expect a tightening market will lead to additional price increases throughout the year," he said.
Doyle said the company expected potash demand to range between 55 and 60 million tons in 2011, and estimated operational capability of approximately 61 million tons.
Potash Corp. also said it would split shares on a 3-for-1 basis. Stockholders on Feb. 16 will get two shares for each they own. And it raised the pre-split dividend to 21 cents per share from 10 cents per share.
For all of 2010, the company earned $1.81 billion, or $5.95 per share, on $6.54 billion in revenue, compared with $980.7 million, or $3.23 per share, on sales of $3.98 billion in 2009.
In afternoon trading, shares surged 3.27 percent to $174.14. Earlier, the stock set a 52-week high of $178.71.


Updated : 2021-04-11 03:56 GMT+08:00