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Potash Corp profit misses, outlook weakens as prices slide

By Rod Nickel

(Reuters) - Potash Corp of Saskatchewan , the world's biggest fertilizer producer, reported a lower-than-expected quarterly profit on Thursday and cut its outlook as prices of its crop nutrients fell.

Potash's U.S.-listed shares dropped nearly 4 percent to about $36.52 in trading before the market opened.

Producers of crop nutrients potash and phosphate have struggled to stop a slide in prices. Demand in key importer India has been soft because of reduced government subsidies and a weakening rupee.

The decline in potash prices has prompted several major companies, including Vale SA and Mosaic Co , to delay plans for new or expanded mines.

Stocks of North American potash have also piled up in the past year, sitting about 14 percent above the five-year average in June. Both Potash and rival Mosaic have announced production curtailments.

Potash said on Thursday that it would run two of its mines at reduced rates for the rest of the year.

The Saskatoon, Saskatchewan-based company, the world's largest potash producer by capacity, said it expected 2013 earnings of $2.45 to $2.70 per share, down from a prior forecast of $2.75 to $3.25. Analysts on average had forecast $2.89, according to Thomson Reuters I/B/E/S.

For the current third quarter, Potash forecast a profit of 45 to 60 cents per share, far short of Wall Street expectations of 73 cents.

Net earnings in the second quarter rose to $643 million, or 73 cents per share, from $522 million, or 60 cents per share, a year earlier, when the company took a large impairment charge on one of its investments.

Earnings per share in the latest quarter fell into the lower end of the company's forecast range and missed analysts' estimates of 81 cents.

Sales fell about 11 percent to $2.14 billion, while analysts were expecting $2.2 billion.

Potash's U.S.-listed stock has slumped about 14 percent since hitting its 2013 peak about six months ago.

The company said after markets closed on Wednesday that it would buy back $2 billion, or 5 percent, of its stock over one year.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Lisa Von Ahn)