PotashCorp in 2Q15: Mixed Results Pressure Stock Performance



PotashCorp: Share price movement

Potash Corporation (POT), also known as PotashCorp, hasn’t experienced great stock performance lately. Year-to-date, shares have fallen 23.64%. PotashCorp’s competitor Mosaic (MOS) has also fallen 3.37%. CF Industries (CF) and Agrium (AGU), on the other hand, have performed better, with returns of 13% and 7%, respectively. The broader VanEck Vectors Agribusiness ETF (MOO) has risen 1.8% year-to-date.

2Q15 results

PotashCorp released its 2Q15 earnings on July 30, 2015, with an adjusted earnings per share, or EPS, of $0.50, missing analyst estimates of $0.51. The 2Q15 EPS fell 10.9%, down from $0.56 in the corresponding quarter a year ago.

During the second quarter, PotashCorp generated $1.7 billion in revenue, an 8.5% decline compared to the corresponding quarter a year ago. Most of this decline came from weakness in the firm’s nitrogen segment where revenues fell 14.7% to $559 million. The potash segment was up slightly, with 0.13% growth contributing $748 million compared to a year ago. In this series, we’ll discuss what the future holds for PotashCorp in light of its 2Q15 earnings and its stock price.

Company overview

PotashCorp is the largest producer of potash fertilizers. Most of its operations are located in Canada, the US, and Trinidad. According to the company, its potash operations account for 20% of global potash production. PotashCorp also produces nitrogen and phosphate fertilizers. The company’s nitrogen and phosphate capacity respectively accounted for 2% and 3% of global capacity in 2014.

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