The Dividend Daily

Fertilizer maker Potash Corp. (POT) said Thursday that its third quarter profit plummeted 80% from last year, but still beat analyst estimates. The company’s guidance was disappointing, however, sending its shares lower.

The Saskatchewan, Canada-based company reported third quarter net income of $248.8 million, or 82 cents per share, compared with $1.24 billion, or $3.93 per share, in the year-ago period.

Sales from 64% from last year, to $1.1 billion.

On average, Wall Street analysts expected a slightly lower profit of 81 cents per share.

In 2008. the company reported a five-fold increase in profits, when potash market conditions were tight and pricing was at all-time highs.

Looking ahead, the company forecast fourth quarter earnings of 65 cents to 85 cents per share. Analysts currently expect a much higher profit of $1.24. For the full year, Potash also said it expects earnings to be at the low end of its previously forecast range of $3.25 to $3.75 per share.

Potash shares fell nearly $3 in premarket trading Thursday, but pared much of those losses shortly after the opening bell.

The Bottom Line
We had removed shares of POT from our “recommended” list on June 3, when the stock was trading at $116.39. The company has a dividend yield of .39%, based on last night’s closing stock price of $102.48. The stock has technical support in the $85-$90 price area. If the shares can firm up, we see overhead resistance around the $100-$107 price levels. We would remain on the sidelines for now.

Potash Corp. (POT) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.