Compass Minerals (CMP) Tops Q3 EPS by 3c

Compass Minerals (NYSE: CMP) reported Q3 EPS of $0.81, ex-items, $0.03 better than the analyst estimate of $0.78. Revenue for the quarter came in at $240.5 million versus the consensus estimate of $225.8 million.

“A rebound in pre-season deicing demand coupled with improved pricing drove strong salt segment results this quarter, while our plant nutrition business continues to benefit from strong demand for its differentiated products,” said Fran Malecha, Compass Minerals president and CEO. “Additionally, the gain we reported from the Goderich tornado insurance settlement marks a full recovery of the insurable losses we incurred. Our attention continues to be on executing the initiatives which will further increase our profitability as well as our ability to respond to market opportunities and weather variability.”

OUTLOOK

The company’s current outlook remains consistent with prior guidance for both the salt and plant nutrition businesses.

Assuming average winter weather events, the company anticipates total salt segment sales volumes of four million tons for the fourth quarter of 2014. Average selling price for all salt products in the fourth quarter is expected to increase approximately 15 percent from 2013 results. The expected price improvement is principally driven by the results of the recently completed bidding process for 2014-2015 North American highway deicing contracts. On average, contract pricing for Compass Minerals’ awarded bids increased approximately 25 percent from the 2013 bid season.

Operating margin percentage for the salt segment is expected to expand to between 26 and 28 percent in the fourth quarter, as improved pricing and lower production costs should more than offset the impact of purchased salt and the higher logistics costs which are impacting manufacturers throughout North America.

The company expects positive market fundamentals for specialty plant nutrients to continue for the remainder of 2014. The company anticipates fourth-quarter plant nutrition segment sales volumes of sulfate of potash and micronutrients to total 90,000 to 100,000 tons at average selling prices between $725 and $750 per ton. With consistent operating rates and the continued use of potassium chloride to supplement pond-based production, the company expects to generate an operating margin between 28 and 30 percent in the fourth quarter of 2014.

For earnings history and earnings-related data on Compass Minerals (CMP) click here.

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