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What Does 2Q16 Hold for Intrepid Potash? An Earnings Preview

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Part 5
What Does 2Q16 Hold for Intrepid Potash? An Earnings Preview PART 5 OF 7

Will Intrepid Potash’s Earnings Get Better in 2Q16?

2Q16 earnings expectations

Intrepid Potash (IPI) is expected to announce its 2Q16 earnings on July 26, 2016. Wall Street analysts are estimating a $0.15 loss per share. The challenging potash pricing environment (MXI) and weak demand, as we saw earlier in this series, have caused the company’s situation to worsen in 2016.

Will Intrepid Potash&#8217;s Earnings Get Better in 2Q16?

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A decline in earnings

With a $0.15 loss per share in 2Q16, the company would report a loss for the fifth consecutive quarter. Compared to a loss per share of $0.08 in 2Q15, the upcoming quarter’s per-share loss would represent a steep decline YoY (year-over-year).

For 2016, the company is expected to report $0.54 loss per share, or a 77% decline in earnings from 2015. However, things appear to improve as we go into 2017. Analysts are estimating Intrepid Potash to report an earnings growth of 59% in 2017.

For 2Q16, Agrium (AGU) is expected to report a 13% decline in earnings per share at $4.10 compared to $4.71 in 2Q15. By comparison, PotashCorp (POT) is expected to report earnings per share of $0.19, which would be a decline of 61% YoY. Mosaic (MOS) is also expected to report a decline in earnings by as much as 87%, to $0.14 per share.

CF Industries (CF), a pure nitrogen fertilizer player, unlike Intrepid Potash, Agrium, and PotashCorp, is also expected to report a decline in earnings per share for 2Q16 at $0.67 per share, or a 58% YoY decline.

Next, let’s look at IPI’s valuation multiple compared to its peers.

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