SASKATCHEWAN — Potash Corporation of Saskatchewan Inc. (PotashCorp) announced preliminary unaudited financial information, and reported fourth-quarter earnings of $0.07 per share ($59 million), bringing earnings for the year to $0.40 per share ($336 million). Results were down from the $0.24 per share ($201 million) and $1.52 per share ($1.3 billion) earned in the respective periods of 2015.

Gross margin for the quarter ($183 million) and the year ($850 million) were well below 2015 levels, primarily due to weaker prices for all three nutrients. Cash from operating activities was $353 million in the fourth quarter and $1.3 billion for the year, also well below last year’s comparable totals.

Weaker prices for nearly all our phosphate products resulted in gross margin of $8 million for the quarter and $52 million for the year, significantly lower than in the comparable periods of 2015.

Sales volumes of 0.7 million tonnes for the quarter and 2.7 million tonnes for the year trailed last year’s comparable amounts of 0.8 million tonnes and 2.9 million tonnes, respectively, primarily due to weaker demand for our feed and industrial products.

Our average realized phosphate price for the quarter was $404 per tonne, down from $522 per tonne in the same period last year, the result of weaker fertilizer realizations.

Cost of goods sold per tonne of $393 for the fourth quarter was lower than the $443 per tonne in the same quarter in 2015, largely due to lower sulfur and ammonia input costs.

We anticipate our 2017 potash sales volumes will be in the range of 8.7-9.4 million tonnes. We believe recent positive pricing trends will carry into the new year and – along with our expectations of lower per-tonne costs – forecast full-year potash gross margin of $550-$800 million.

In nitrogen, we see 2017 as a transition year as the market adjusts to new capacity, particularly the ramp-up of new plants in the US, which we anticipate will shift trade patterns and weigh on domestic prices. While we expect some seasonal price strength, competitive pressures are expected to keep margins below 2016 levels.

In phosphate, we expect challenging market fundamentals to weigh on realizations for our products and profitability in this segment.

Given these considerations, we forecast combined nitrogen and phosphate gross margin will be in the range of $150-$400 million in 2017.

Capital expenditures are anticipated to be approximately $600 million – lower than the previous year – as our multi-year expansion-related spending is now complete.

Based on these factors, we forecast full-year 2017 earnings of $0.35-$0.55 per share, including merger-related costs of $0.05 per share.