Potash Corp. profit tops expectations

By Reuters
Posted Oct. 28, 2010 at 5:43 a.m.

Potash Corp., the world’s top fertilizer maker, steamrolled quarterly earnings expectations on Thursday on the back of stronger potash demand and higher prices for its nitrogen- and phosphate-based nutrients.

The Canadian fertilizer maker is currently battling a $39 billion hostile bid from BHP Billiton. Potash Corp has flatly rejected BHP’s bid and launched a lawsuit against the Anglo-Australian miner in an attempt to stymie a takeover.

Potash Corp said third-quarter net income rose to $402.7 million, or $1.32 a share, from $247.9 million, or 82 cents a share, a year earlier.

Quarterly revenue rose 43 percent to $1.58 billion.

Analysts on average had forecast earnings of $1.16 a share on revenue of $1.31 billion, according to Thomson Reuters I/B/E/S.

Shares of Potash Corp rose 0.5 percent to $148 in premarket trading. BHP launched the $130-a-share bid in August, but Potash Corp’s stock has consistently traded well above that level, indicating that a sweetened bid will be required for the suitor to carry the day.

The company’s potash business, which typically accounts for the lion’s share of its profits, generated two-thirds of gross margin in the quarter, as demand for the key crop nutrient has staged a steady comeback following a lean patch in 2009.

BHP, the world’s largest mining company, is courting Potash Corp with an eye on winning control of its world-class potash assets — most of which are located in the prairie province of Saskatchewan. Potash is the common name used to describe various compounds containing potassium, and Potash Corp is the world’s No. 1 producer of the mineral.

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