Potash Corp of Saskatchewan, the world's biggest fertilizer producer, lowered its 2009 earnings target on Friday, citing weak sales.
The company said it now expects full-year earnings to be between $3.25 to $3.75 per share, down from its previously posted guidance of $4 to $5 a share. As well, third-quarter earnings per share are expected to be at the low end of its $0.80 to $1.20 forecast.
Potash Corp said it lowered its profit expectations because of weak sales brought about by reduced demand and limited restocking of potash fertilizers by distributors worldwide.
However the company noted that 20 million tonnes of output has been curtailed by producers and it expects to restrict its own output until demand returns.
The company expects a rebound next year, as low levels of potash in the soil cut farmers' yields and raise the need for additional crop nutrients, with 2010 demand forecast at 50 million to 55 million tonnes.
We anticipate a new wave of demand growth that will allow us to once again demonstrate the full potential of our company, Bill Doyle, Potash Corp's chief executive, said in a statement.
Along with potash sales that are expected to be 60 percent lower than last year, the company said it has seen an 85 percent drop in its gross margin for phosphate and nitrogen.
Potash Corp's New York-listed shares rose 0.65 percent to C$97.14 on Friday but are down 41 percent over the past 12 months. The stock was down 1.3 percent at C$101.87 in Toronto.
The company detailed its reduced expectations after markets closed.
(Reporting by Scott Haggett; editing by Rob Wilson)