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Does The Street Have Potash Corp. of Saskatchewan Figured Out?

By Seth Jayson – Updated Apr 7, 2017 at 12:16PM

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Checking expectations

Potash Corp. of Saskatchewan (NYSE: POT) is expected to report Q3 earnings on Oct. 25. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Potash Corp. of Saskatchewan's revenues will shrink -7.1% and EPS will decrease -23.4%.

The average estimate for revenue is $2.04 billion. On the bottom line, the average EPS estimate is $0.72.

Revenue details
Last quarter, Potash Corp. of Saskatchewan tallied revenue of $2.27 billion. GAAP reported sales were 3.6% higher than the prior-year quarter's $2.19 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.99. GAAP EPS of $0.60 for Q2 were 38% lower than the prior-year quarter's $0.96 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 52.7%, 60 basis points worse than the prior-year quarter. Operating margin was 46.8%, 140 basis points worse than the prior-year quarter. Net margin was 23.0%, 1,530 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $8.04 billion. The average EPS estimate is $3.03.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,740 members out of 4,906 rating the stock outperform, and 166 members rating it underperform. Among 839 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 811 give Potash Corp. of Saskatchewan a green thumbs-up, and 28 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 $53.31.

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 positions in the stocks mentioned above. 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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