Potash Corp Q3 2017 Down 34 Percent from Q3, 2016

earnings

PotashCorp (TSX:POT,NYSE:POT) recorded a 34 percent decrease in earnings over Q3, 2017 compared to the same period in 2016 but overall year-to-date earnings increased from the previous year.

The company announced Q3 earnings of $53 million in Q3, 2017 down from the $81 million that the company earned in Q3, 2016. However, the firm’s year-to-date earnings are up 45 percent from the previous year. Over a nine month period PotashCorp earned $403 million in profit on $3.5 billion in sales in 2017 compared to $277 million on revenues of $3.4 billion during the same period in 2016.

“With strong customer engagement in all key markets, potash fundamentals continued to improve in the third quarter,” said company CEO Jochen Tilk. “In this environment, we delivered stronger potash results on record quarterly sales volumes and higher price realizations. Importantly, we expect that the rising consumption trends in place today will continue, with the potential for another record shipment year in 2018.”

Recently, PotashCorp completed its $3 billion Rocanville mine expansion, which it said will reduce the cost of mining the potassium-laced salts. The mine expansion and a merger with Agrium (TSX:AGU,NYSE:AGU) is part of a strategy to maintain strength as potash prices have fallen from about $900 per tonne in 2008 to $218 per tonne as of October 26.

PotashCorp is expected to merge with Agrium by the end of 2017 once the merger receives regulatory clearance from the US and China. The company received clearance from India recently on the condition that it agree to divest 3 of its minority shareholdings. Brian Madden, portfolio manager at Goodreid Investment Counsel and PotashCorp shareholder said the resulting firm, Nutrien, “is going to be bigger and less volatile.”

Madden told The Globe and Mail that the merger would combine PotashCorp’s fertilizer capacity with Agrium’s network of stores that sell fertilizer and seed to farmers.

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.

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