The Gory Details on Potash Corp. of Saskatchewan's Double Fumble

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

The 10-second takeaway
For the quarter ended June 30 (Q2), Potash Corp. of Saskatchewan missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted. GAAP earnings per share grew significantly.


Gross margins dropped, operating margins dropped, net margins grew.

Revenue details
Potash Corp. of Saskatchewan logged revenue of $2.00 billion. The 16 analysts polled by S&P Capital IQ expected sales of $2.15 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $2.27 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 $0.73. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.80 per share. GAAP EPS of $0.73 for Q2 were 22% higher than the prior-year quarter's $0.60 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 49.0%, 370 basis points worse than the prior-year quarter. Operating margin was 41.9%, 490 basis points worse than the prior-year quarter. Net margin was 32.2%, 920 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.97 billion. On the bottom line, the average EPS estimate is $0.74.

Next year's average estimate for revenue is $7.90 billion. The average EPS estimate is $2.88.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,768 members out of 4,940 rating the stock outperform, and 172 members rating it underperform. Among 719 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 689 give Potash Corp. of Saskatchewan a green thumbs-up, and 30 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 $46.52.

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The article The Gory Details on Potash Corp. of Saskatchewan's Double Fumble 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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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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