Potash (POT) Cuts Full Year Guidance; Intrepid Potash (IPI) Falls off Cliff

Sometimes you are lucky; sometimes you are good - we've had a very fortunate streak of late; not just in our purchases/trades but in our sales. We exited Apple (AAPL) earlier this week and the next day the stock gets creamed on speculation about Steve Jobs health, and the pullout from MacWorld. Wednesday we sold out almost all our Potash (POT) [Dec 17: Bookkeeping - Cutting Potash to Holding Position] and Thursday evening they lower guidance. We are not gloating, because the minute you feel smug, Mother Market comes and whacks you upside the head. But the past few weeks have been quite enjoyable.

Now, more interesting will be the market's reaction - how much of this is priced in the stock already? I did say as these guys offered guidance (fertilizer) and said everything would recover soon... "we'll see" - it appears the recovery is not coming quite so quickly. Full report here.

• Reflecting the current softness in demand for crop nutrients as a result of widespread uncertainty in the global economy, Potash Corporation of Saskatchewan Inc. (PotashCorp) today announced the downward revision of full-year 2008 earnings guidance to approximately $10.75 per share(1), which is 10 percent below the midpoint of our last indicated guidance range.
• Fourth-quarter earnings are expected to be the third-highest in our history (behind only the second and third quarter 2008) and full-year 2008 earnings will be our fifth consecutive record year and should be more than triple the $3.40 per share earned in 2007. This revision was precipitated by weaker fourth-quarter sales volumes in all three nutrients, lower potash volumes to higher netback spot markets and lower prices and margins in our nitrogen and phosphate segments.

"Like every other industry, agriculture has felt the impact of the global financial downturn," said PotashCorp President and Chief Executive Officer Bill Doyle. "Unlike other industries, however, food production and fertilizer applications cannot be delayed indefinitely. The global food crisis captured the world's focus early in 2008, but attention and capital is currently being diverted to economic issues. That does not mean the food crisis has been resolved. In reality, it could become more severe, increasing the need for and value of fertilizers, especially potash. Given the essential nature of our products and the underlying fundamentals for our business, we anticipate strong demand will return as 2009 progresses, creating even greater opportunities for growth."

I agree on the food crisis end; let's see how desperate the world is for fertilizer in the 1st half of 2009...

Intrepid Potash (IPI) had a much more alarming shortfall - this is a smaller United States player who has a much more narrow focus.

• Intrepid today has announced that, consistent with public announcements from other fertilizer producers, the Company has seen the reduction and deferral of sales of potash and langbeinite, which normally would occur in the fourth quarter, into early 2009. Due to these reductions and deferrals, the Company expects sales levels for the fourth quarter 2008 to be less than half of the levels seen in the third quarter of this year.

Long Potash in fund; no personal position