What: Shares of Intrepid Potash, Inc. (NYSE:IPI) plunged as much as 27% today after it reported third-quarter earnings.
So what: Third-quarter revenue dropped 48% to $53.7 million and the net loss jumped from $1.2 million to $8.1 million, or $0.11 per share. Sales fell below expectations of $54.5 million but on an adjusted basis the loss per share of $0.06 was a penny ahead of expectations.
What really disappointed investors was the company's large reduction in full-year guidance. Potash production is now expected to be 775,000-785,000 tons from a previous range of 830,000-850,000 tons, and the cost-of-goods-sold range was increased $5 to $290-$305 per ton. Trio, Intrepid's specialty fertilizer, also saw production estimates lowered to 150,000-160,000 tons and cost-of-goods-sold estimate raised to $270-$280 per ton.
Now what: There's really not any good news for costs or the potash market in general. High inventory levels at customers has pushed back some purchasing, making an already difficult market worse. Management is trying to cut costs, but low utilization rates are offsetting some of that impact. With the weak market and growing losses, I don't see any reason to jump into this stock, even after today's discount.