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

Checking expectations

Potash Corp. of Saskatchewan (NYSE: POT) is expected to report Q2 earnings on July 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 contract -5.9% and EPS will shrink -19.2%.

The average estimate for revenue is $2.14 billion. On the bottom line, the average EPS estimate is $0.80.

Revenue details
Last quarter, Potash Corp. of Saskatchewan recorded revenue of $1.95 billion. GAAP reported sales were 19% higher than the prior-year quarter's $1.64 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, EPS came in at $0.63. GAAP EPS of $0.63 for Q1 were 13% higher than the prior-year quarter's $0.56 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 44.4%, 190 basis points better than the prior-year quarter. Operating margin was 37.8%, 70 basis points better than the prior-year quarter. Net margin was 28.5%, 140 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $7.93 billion. The average EPS estimate is $2.87.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 4,763 members out of 4,934 rating the stock outperform, and 171 members rating it underperform. Among 718 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 691 give Potash Corp. of Saskatchewan a green thumbs-up, and 27 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 $46.14.

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Add Potash Corp. of Saskatchewan to My Watchlist.

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. 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

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.