Limited Global Production Powers Potash Higher (POT, CF, CAGC, CGA, TNH, IPI)
Shares of Potash Corp of Saskatchew (POT), the world’s largest fertilizer maker, are up 3% after the company posted a second-quarter profit of $840 million, or 96 cents a share, compared with earnings of $480 million, or 53 cents a share, a year earlier. The good news from Potash seems to be helping the fertilizer sector as the Agricultural Chemical and Fertilizer Stocks Index is down 1%.
Potash cited continued demand for fertilizer and limited global production resulted in increased prices for its products, especially potash. Gleacher and Co. said that the numbers were much stronger than expected and reiterated potash prices as the main factor, according to Reuters. At the end of June, inventory levels for Potash were 26% below its average of the last 5 years, according to Reuters.
Potash reiterated that tight markets will continue to drive prices higher and said that China signed new supply commitments in the second quarter. Potash also raised its full year earnings forecast to $3.40 to $3.80 per share, up from $3 to $3.40 per share, according to Reuters . Gleacher said the full year earnings increase is largely due to the solid earnings for the first half of this year.
Elsewhere in the Index, shares of CF Industries Holdings (CF) and Intrepid Potash (IPI) are higher by 3%, while China Agritech (CAGC) and China Green Agriculture (CGA) are lower by 3%. Terra Nitrogen Company (TNH) is contributing 3% to the upside as well.
Investors can track the Agricultural Chemical and Fertilizer Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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