Why follow Potash Corp.?
Potash Corp. is one of the largest fertilizer producers in the world. Unlike CF Industries Holdings Inc. (CF), Mosaic Co. (MOS), Sociedad Quimica y Minera de Chile (SQM), and Intrepid Potash Inc. (IPI), which primarily focus on one or two types of fertilizers, Potash Corp. (POT) manufactures all three types of fertilizers: nitrogen, phosphate, and potash.
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Because POT is the first to release its earnings, the company’s earnings and discussion calls provide investors with a preliminary assessment of the industry’s outlook, which affects the aforementioned companies and the VanEck Vectors Agribusiness ETF (MOO). While company-specific factors like lower-cost mine expansions, share buybacks, and dividend increases do affect overall share price performance, companies’ performances are largely driven by industry factors.
Fourth quarter down—again
Fourth-quarter earnings for fiscal year 2013 were just released on Thursday, January 30, 2014, early in the morning, at 6:00 AM Eastern Time—one of the most unusual companies out there to be reporting results in the morning. Earnings adjusted for one-time special items came in at $0.31 a share, lower than the prior quarter’s $0.41 and comparable 2012 quarter of $0.52. Earnings also missed analysts’ average estimate of $0.32, although this wasn’t very significant.
Share price movements
As soon as the market opened up, Potash Corp. (POT) fell almost 6% from the prior day’s close. But it gradually recovered after the initial sell-off, ending the day with a slight loss of just 1.89%. Intrepid Potash Inc. (IPI), the VanEck Vectors Agribusiness ETF (MOO), and Sociedad Quimica y Minera de Chile (SQM) ended the day with losses of ~2.31%, ~0.39%, and ~1.22%, respectively. Mosaic Co. (MOS) managed to eke out a slight gain. While prices for most companies continued to fall as concerns about growth in emerging markets rose, a key driver of food consumption and fertilizer demand, shares have recovered since, along with the broad market.