Potash (POT) reported a disastrous second quarter, as the fertilizer company's profits plunged 38 percent. To add fuel to the fire, the company also projected earnings for the second half would fall below previous expectations.
Earnings for 2012 were downwardly revised from $3.20 to $3.60 to $2.80 to $3.20 a share. Analysts were looking for earnings estimates of $3.47 a share on the year.
For the next quarter Potash projected earnings to come in at a range of 70 cents a share to 90 cents a share. The Street was looking for 95 cents a share.
Even so, Potash noted that the drought, which has resulted in higher crop prices, should result in farmers increasing their use of fertilizer for 2013.
Income in the 2nd quarter dropped 60 cents a share to finish at $522 million, way down from the 96 cents a share or $840 million generated last year.
Part of the poor results were attributed to a $341 million impairment charge from an investment by Potash in Chinese fertilizer maker Sinofert Holdings Ltd.
The phosphate segment also dragged on the company, as margins were lower than expected because of weaker demand and prices.
On the other hand, the nitrogen business of the company was helped by low natural gas prices.
Potash raised its forecast for combined phosphate and nitrogen gross margin in 2012 to a range of $1.4 billion to $1.6 billion, an increase over the $1.3 billion to $1.5 billion originally projected.
Because of the announcement that the ECB would do everything to prop up the euro, shares of Potash closed up at $44.99, gaining $0.50, or 1.12 percent. In after hours trading over half of that was already given back.