Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s Potash Corporation of Saskatchewan (NYSE:POT) (TSE:POT), the world’s largest producer of the fertilizer by capacity, is expected to post $901.37 million in sales for the current quarter, according to a new report by Zacks Investment Research.
Two analysts have provided estimates of POT’s earnings, with the lowest sales estimate coming in at $901.23 million and the highest estimate coming in at $901.50 million. Such estimates imply a 2.9% year-over-year decrease as the company posted sales of $928 million during the same quarter of 2016.
“The company remains exposed to a weak pricing environment. Potash pricing remains under pressure due to elevated global inventories,” the document reads.
Based on sales averages obtained through a survey of research analysts that provide coverage for Potash Corporation of Saskatchewan, Zacks’ experts predict that in 2018 the Saskatoon-based producer will post sales of $3.94 billion per share, with estimates ranging from $3.86 billion to $4.01 billion.
The fertilizer maker, who owns five plants in Saskatchewan and one in New Brunswick, last released its quarterly earnings data in late October and reported $0.09 earnings per share for the quarter, missing analysts’ consensus estimates of $0.12. Yet, the firm had revenue of $1.23 billion, which also differed from analysts’ expectations of $1.03 billion.
Also on the bright side, Zacks Investment says the company will benefit from the expanded operational capability resulting from the proposed merger with Agrium (TSX, NYSE:AGU). “Following the closure of the transaction, shareholders of Potash Corp. will own roughly 52% of the combined company,” the research firm states.
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“Zacks’ experts predict that in 2018 the Saskatoon-based producer will post sales of $3.94 billion per share” (you’d think they might consider raising the quarterly dividend from a dime to, say a million bucks, then)