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Will Potash Corporation’s 4Q15 Results Flip Investors’ Somber Mood?

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Potash Corporation’s 4Q15 earnings

Potash Corporation (POT), one of the largest producers of potash-based fertilizers, is expected to release its 4Q15 earnings on January 28 before the market opens. The company has fallen 4.7% YTD (year-to-date). In comparison, Sociedad Química y Minera de Chile (SQM) has fallen 13.6%, Mosaic (MOS) has fallen 7.8%, and Intrepid Potash (IPI) has fallen 27% as of January 18, 2016. The VanEck Vectors Agribusiness ETF (MOO) has also fallen 8.1% YTD, indicating a continuing overall weakness in the agricultural industry.

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A dismal 2015

Investors in fertilizer stocks should remember that over the long term, food consumption is only going to increase with a growing population. Therefore, fertilizer companies stand to benefit from growing demand. But a dismal 2015 with almost all agricultural fertilizer companies seeing negative returns has made investors rethink their investment options. The chart above shows how Potash Corporation’s share price has trended downwards since 2014 with the most recent 3Q15 earnings coming in lower year-over-year. Will Potash Corporation’s 4Q15 earnings repeat this deceleration?

Series overview

In this pre-earning series, we’ll discuss some of the key topics that will be important points of discussion during Potash Corporation’s 4Q15 earnings call. This includes a discussion of fertilizer prices, shipments, global economic conditions, farm economics, and other factors that affect the company’s performance. We’ll wrap up this series by looking at valuation multiples, analyst recommendations, and price targets for the company.

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