Potash Corp. of Saskatchewan Beats on EPS But GAAP Results Lag

Just the facts, Fool.

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

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Potash Corp. of Saskatchewan met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
Potash Corp. of Saskatchewan reported revenue of $1.99 billion. The 15 analysts polled by S&P Capital IQ predicted a top line of $2.02 billion on the same basis. GAAP reported sales were 9.3% lower 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
EPS came in at $0.74. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.72 per share. GAAP EPS of $0.74 for Q3 were 21% lower than the prior-year quarter's $0.94 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 46.6%, 500 basis points worse than the prior-year quarter. Operating margin was 40.3%, 790 basis points worse than the prior-year quarter. Net margin was 32.4%, 530 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.96 billion. On the bottom line, the average EPS estimate is $0.75.

Next year's average estimate for revenue is $7.98 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 4,744 members out of 4,910 rating the stock outperform, and 166 members rating it underperform. Among 844 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 815 give Potash Corp. of Saskatchewan a green thumbs-up, and 29 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 $52.30.

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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.

Stocks Mentioned

Potash Corporation of Saskatchewan Inc.

POT

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