The Gory Details on Potash Corp. of Saskatchewan's Double Fumble

Potash Corp. of Saskatchewan (NYS: POT) reported earnings on July 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Potash Corp. of Saskatchewan missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted. GAAP earnings per share grew significantly.

Gross margins dropped, operating margins dropped, net margins grew.

Revenue details
Potash Corp. of Saskatchewan logged revenue of $2.00 billion. The 16 analysts polled by S&P Capital IQ expected sales of $2.15 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $2.27 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.73. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.80 per share. GAAP EPS of $0.73 for Q2 were 22% higher than the prior-year quarter's $0.60 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.0%, 370 basis points worse than the prior-year quarter. Operating margin was 41.9%, 490 basis points worse than the prior-year quarter. Net margin was 32.2%, 920 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.97 billion. On the bottom line, the average EPS estimate is $0.74.

Next year's average estimate for revenue is $7.90 billion. The average EPS estimate is $2.88.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,768 members out of 4,940 rating the stock outperform, and 172 members rating it underperform. Among 719 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 689 give Potash Corp. of Saskatchewan a green thumbs-up, and 30 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 $46.52.

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