Potash Corp. of Saskatchewan Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Potash Corp. of Saskatchewan (NYS: POT) reported earnings on Oct. 25. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Sep. 30 (Q3), Potash Corp. of Saskatchewan met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share dropped significantly.


Margins dropped across the board.

Revenue details
 Potash Corp. of Saskatchewan reported revenue of $1.99 billion. The 15 analysts polled by S&P Capital IQ predicted a top line of $2.02 billion on the same basis. GAAP reported sales were 9.3% lower than the prior-year quarter's $2.19 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.74. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.72 per share. GAAP EPS of $0.74 for Q3 were 21% lower than the prior-year quarter's $0.94 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 46.6%, 500 basis points worse than the prior-year quarter. Operating margin was 40.3%, 790 basis points worse than the prior-year quarter. Net margin was 32.4%, 530 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $1.96 billion. On the bottom line, the average EPS estimate is $0.75.

Next year's average estimate for revenue is $7.98 billion. The average EPS estimate is $3.03.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,744 members out of 4,910 rating the stock outperform, and 166 members rating it underperform. Among 844 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 815 give Potash Corp. of Saskatchewan a green thumbs-up, and 29 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Potash Corp. of Saskatchewan is outperform, with an average price target of $52.30.

The article Potash Corp. of Saskatchewan Beats on EPS But GAAP Results Lag originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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