Nutrien Ltd (NYSE:NTR) stock fell 5% (As on May 11, 11:29:09 AM UTC-4, Source: Google Finance) after the company cut its forecast for 2023 earnings as elevated fertilizer prices owed to Western sanctions on Russia and Belarus weigh on demand. The company has also reported a lower-than-expected quarterly profit due to a fall in sales as farmers delayed purchases due to high prices. Though fertilizer prices have dipped from record highs scaled last year, farmers are holding back on purchases on expectations of a further decline. The Canadian firm’s North America potash sales volume dropped 30%, with prices averaging $401 per tonne during the reported quarter, 41% lower compared with last year.

Moreover, Nutrien Ag Solutions (“Retail”) adjusted EBITDA declined to $(34) million in the first quarter of 2023 primarily due to lower sales and gross margins for crop nutrients and crop protection products compared to the record levels achieved in 2022. Crop nutrient margins were below normalized levels in the first quarter as prices declined and we worked through higher cost inventory. Potash adjusted EBITDA declined to $676 million in the first quarter of 2023 due to lower net realized selling prices and lower sales volumes. North American sales volumes were impacted by just-in-time buying. Lower offshore demand from customers in Asia was largely offset by record first quarter Canpotex sales volumes to Brazil. Nitrogen adjusted EBITDA declined to $676 million in the first quarter of 2023 due to lower net realized selling prices for all major nitrogen products. This was partially offset by lower natural gas costs and increased operating rates at the North American nitrogen plants.

NTR in the first quarter of FY 23 has reported the adjusted earnings per share of $1.11, missing the analysts’ estimates for the adjusted earnings per share of $1.50, according to Refinitiv data. The company had reported 20 percent fall in the adjusted revenue to $6.1 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue of $2.47 billion.

The company cut its full-year adjusted earnings outlook to between $5.50 per share and $7.50 per share, from $8.45 per share to $10.65 per share forecast earlier. Analysts on average expect a profit of $8.56 per share. Nutrien  anticipates a rise in global potash demand in the second half of 2023 as inventories deplete and affordability for farmers improves. It also expects potash shipments from Belarus to be higher than its earlier estimates.