PCS issues profit warning (March 28, 2003)

Potash Corp. of Saskatchewan (POT-T) warns that it will miss its previous first-quarter earnings estimate of US25 per share.

The world’s biggest fertilizer maker says the main problem is the strengthening Canadian dollar.

The company estimates that every penny gain in the value of the Canadian dollar costs it US$1.2 million before taxes. In the last four months, PCS says the loonie has gained almost 10% against the U.S. dollar, resulting in a US14-per-share bite out of its earnings.

PCS also cites increased costs and timing issues with spring product sales. The company notes that first-quarter results will also be impacted by reduced nitrogen operating rates and higher than expected natural gas prices, which increased costs in nitrogen and potash.

Still, the company sticks to its previous estimate for full-year earnings of about US$2 per share, almost doubling earnings in 2001.

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