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Potash Corp. (POT) Reports 220% Increase in Second Quarter Net Income, Raises FY08 Guidance Yet Again

Potash Corporation of Saskatchewan Inc. (POT), Canada’s largest fertilizer company specializing in potash, phosphate and nitrogen products, reported better than expected second quarter results this morning. Revenues nearly doubled year-over-year to $2.62 billion vs. analysts’ estimates of $2.55 billion. Net income surged 220% to $905.1 million, or $2.82 per diluted share. Analysts were expecting earnings of $2.61 per share.

“This quarter established a new standard of performance for our company,” said PotashCorp President and Chief Executive Officer Bill Doyle. “We are experiencing strong growth in demand and are capturing the value of higher prices in all three nutrients, especially in potash. With farmers around the world striving to maximize yields and placing a priority on fertilization, this quarter provided a glimpse of the future potential of our company.”

PotashCorp raised guidance for full-year net income from $9.50 – $10.50 per share to $12.00 – $13.00 per share. Analysts’ estimates currently call for $11.67 per share. For the third quarter the company expects to earn $3.25 – $3.75 per share vs. $3.27 consensus.

“The current operating environment provides an opportunity to deliver record results, but more importantly gives us the ability to reinvest our strong cash flow for sustainable growth in the future,” said Doyle. “Food production and fertilizer demand are not quarter-to-quarter issues. They are long-term necessities tied to human development which are likely to intensify over time. As we have in the past, we will keep our focus on the future and execute strategies designed to generate the greatest long-term value and opportunity for all our stakeholders, including our customers, investors and employees.”

Shares of POT have fallen nearly 20% the past month, from a high of $241.62 to $200.69. Shares of the company tend to trade in tandem with commodities, which have taken a blow the past few weeks as oil futures have fallen over $20 per barrel. The pre-market bid for POT indicates a gap higher on the open of about 5%.

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