Potash profit doubles, dividend hiked

Potash Corporation of Saskatchewan Inc. reports net income of $482.3 million US in the fourth quarter, or $1.61 per share.

It was the highest quarterly total for 2010 and more than double the 79-cent per share earned in the same period last year, the company announced Thursday before markets opened.

Analysts polled by Thomson Reuters were on average expecting earnings per share of $1.68 and revenues of more than $1.65 billion.

The company — which is headquartered in Saskatoon but posts results in U.S. dollars — saw its full-year earnings come in at $5.95 per share, or $1.8 billion, which surpassed the $3.23 per share, or $980.7 million, earned in 2009.

Performance was impacted by takeover response costs (included in other income), which reduced earnings for the fourth quarter and full year by $0.16 per share and $0.18 per share, respectively.

Earlier, the company also announced plans to split its shares three for one in the near future, and said it will more than double its dividend — from 10 cents US to 21 cents per share — to shareholders of record on Feb. 16, 2010.

The moves are aimed at currying investor favour after Potash became the target of a nearly $40 billion hostile takeover offer by Anglo-Australian mining giant BHP Billiton last summer.

Company management staunchly rejected the BHP bid as too low. A competing bid — which some observers speculated could come from a deep-pocketed investor, a consortium of pension funds, or both — never materialized.

The takeover battle became a major political flashpoint in Ottawa, and in the company's home province of Saskatchewan. Premier Brad Wall was an outspoken critic of the bid, and urged Ottawa to reject it.

In the end, the federal government rejected the offer on the grounds it did not provide a net benefit to Canada. BHP withdrew its bid shortly thereafter.

Saskatchewan has the world's largest deposits of potash, a valuable mineral mainly used in fertilizer.