Potash Corp. of Saskatchewan (NYSE; TSX: POT), which holds 10% of Israel Chemicals Ltd. (TASE: ICL) broke its own record today when it published its second quarter financial report today, giving it a boost in the process. Israel Chemicals fell by 4.4% in morning trading on the back of the declines in fertilizer stocks on Wall Street yesterday, but later rallied following the publication of Potash Corp's results and is currently down 0.4%.
Potash Corp. posted a profit of $905.1 million, a 220% jump over the corresponding quarter in 2007, and 62% more than in the preceding quarter. Earnings per share totaled $2.82, and gross profit soared 187% to $1.4 billion.
Potash Corp. raised its full-year earnings guidance by 25% to $12-13 per share from $9.50-10.50, with earnings for the third quarter expected to come in at $3.25-3.75 per share. Earnings per share for the first half of the year more than tripled to $4.54 per share. "This quarter established a new standard of performance for our company," said Potash Corp. president and CEO Bill Doyle.
Bank Hapoalim analyst Gilad Sarig told "Globes", "What we have seen today confirms what we thought would happen in this sector. A 75% gross profit on potash leaves no room for doubt. There have also been strong gains in phosphates. An operating profit of 45% at a time like this is extremely rare.
"Potash Corp's guidance reiterates what we have been saying. The slight fall in commodity prices will not affect margins," added Sarig.
Published by Globes [online], Israel business news - www.globes-online.com - on July 24, 2008
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