Friday, April 30, 2010

UPDATED: "PotashCorp gives analyst deja vu" (POT)

UPDATE: "Potash Trying to Fend Off Bear Market" (POT)
Original post:
The stock is trading up 1.4% at $112.15.
From the Financial Post:

Much like the last quarter, Potash Corporation of Saskatchewan beat expectations in its first quarter results while providing more conservative guidance. The whole thing has left Fai Lee, analyst with RBC Dominion Securities, with a sense of deja vu.

For the first quarter, PotashCorp reported earnings-per-share of $1.55, better than Mr. Lee's $1.36 forecast. The company's guidance had been between 70¢ and $1 at the time it reported its fourth quarter results, but raised them to between $1.30 and $1.50 six weeks later.

"The transitional nature of this year does make forecasting quite difficult and adopting a conservative approach is prudent in our view," he said in a note.

As a result, Mr. Lee has cut his 2010 EPS forecast to $5 from $6.21, reflecting a slower pace of potash price appreciation through the year, along with higher phosphate production costs and lower nitrogen pricing. He is however maintaining his 2011 EPS estimate of $8.51....MORE

Yesterday Schaeffer's Research noted:

...Traders seem less than thrilled with POT's guidance, as the shares have shed about 1% in pre-market trading. The equity is poised to continue a short-term slump beneath pressure from its 10-day and 20-day moving averages, which haven't been bested on a daily closing basis since March 22.

However, a number of options players already seemed to have low expectations for today's earnings report. The largest overnight open interest change for POT was at the out-of-the-money May 120 call, which added 1,284 contracts as a result of Wednesday's trading. The majority of these calls changed hands at the bid price, suggesting they were sold to open....

But a good looking chart: