NEW YORK ( TheStreet) -- Potash Corp. ( POT) turned in better-than-expected results for its second quarter, but a tough summer for fertilizer purveyors led the company to offer conservative guidance for the third period.In its press release, Potash trumpeted the "ongoing rebound" in the crop-nutrient business, and a "return to more normal fertilizer applications" after a prolonged recession-induced drop off in demand on the farm. The company sold 1.9 million metric tons of potash in the second quarter, for example, nearly five times the amount it sold in the corresponding period of 2009. But, as Potash pointed out, its all-important North American sales were still "below historic norms." >>Potash Corp. Hopes for Autumn Rebound Potash also admitted that distributors of its core nutrient have been wary of increasing their inventories. Thus, pricing has been stagnant. Or, in the company's words, "Despite the improvement in demand, without the global restocking that has been seen in certain mineral and metal commodities the pattern of just-in-time purchasing did not provide consistent engagement supportive of upward pricing momentum." Potash told investors to expect third-quarter earnings of 80 cents to $1.20 a share, a rather wide spread that looks conservative. The consensus estimate from sell-side analysts is calling for third-quarter profit of $1.17 a share. Potash's outlook brightens a bit when it comes to the fourth quarter. "The catalysts expected to fuel near-term demand appear to be accelerating," the company said in its press release. "Strong grain consumption continues to tighten global supplies, despite consecutive record harvests in many key growing regions in recent years that have drawn down soil nutrient levels." Potash's bullishness appears rooted in recent strengthening of crop prices. (Rich farmers, after all, make for good fertilIzer customers.)
Twitter and become a fan on Facebook.