Nutrien misses fourth-quarter profit estimates on lower crop potash and nutrient sales
Nutrien fell short of Wall Street expectations for fourth-quarter profit on Wednesday, as the top potash producer struggled with lower sales of crop nutrients and potash, although it raised its quarterly dividend by 1%.
Crop prices, including those of soybean, wheat and corn, have been falling over recent quarters due to oversupply and weakening demand, forcing farmers to curtail spending, impacting firms such as Nutrien.
Quarterly earnings were hit by a year-on-year 37% slump in adjusted core profit in its potash segment to $291 million, hurt by lower net selling prices and sales volumes, which were mainly down in China and other Asian markets.
Quarterly sales for its retail segment were also down about 9% at $3.18 billion from a year earlier, dragged by about a 15% drop in crop nutrients sales due to wet weather conditions in North America, as well as its strategic actions in Brazil.
Reuters reported last year that the company was mulling divestments in South America, replacing management and halting an acquisition spree in Brazil after steep losses in the region.
Nutrien's troubles in South America emerged with fertilizer companies struggling with volatility in global markets, after Russia's invasion of Ukraine sent prices skyrocketing in 2022 only to collapse the following year as farmers held off on purchases and global supplies stabilized.
Earlier this month, Nutrien's Brazilian unit said it would sell its fertilizer blending plants in the country, as it shifts focus to reselling farm inputs through its network of local retailers in Brazil.
The top potash producer now expects to spend between $2 billion and $2.1 billion in the current year, the midpoint of which is down 6.8% from last year.
The Saskatoon, Canada-based firm posted an adjusted profit of 31 cents per share for the three months ended December 31, compared with the analysts' average estimate of 35 cents per share, according to data compiled by LSEG.
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