Nutrien expects strong profit margins amid rising potash prices

The forecast sent US stocks up more than 5% in extended trading


February 20, 2022

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Canadian fertilizer manufacturer Nutrien Ltd. said on Wednesday that a surge in potash prices due to robust global demand and reduced supply would boost its profits in 2022, pushing its U.S. shares more than 5% higher in extended trading, Reuters reported. .

The company expects annual adjusted earnings between $10.20 and $11.80 per share, above analysts’ average estimate of $9.46 per share, according to IBES data from Refinitiv.

Potash prices – a crucial crop nutrient – are near multi-year highs in the United States and Brazil following Western economic sanctions against a major potash supplier in Belarus. Read the full story

The company said it expected supply issues to continue through 2022, including additional restrictions on Belarusian potash transported through Lithuania.

Its earnings last year also benefited from record global potash demand of around 70 million tonnes, helping Nutrien post a nearly quadruple profit in the fourth quarter.

The fertilizer maker expects high corn and soybean prices, along with potential harvest margins well above the 10-year average, to encourage growers to invest in their crops.

It declared a quarterly dividend of 48 cents per share, a 4% increase from a year earlier, and also announced a stock buyback of up to 10% of its public float. Read the full story

On an adjusted basis, the company reported earnings of $2.47 per share, beating estimates of $2.35 per share.