PotashCorp has cut it earnings guidance for the second time in three months, warning that the slump in potash demand was hurting the fertilizer giant more than it had expected.

The world's largest nutrient group lowered its guidance for full-year earnings to $3.25-3.75 a share, from a forecast of $4.00-5.00 a share made in July.

Analysts had been expecting a $4.12-a-share result.

The downgrade, PotashCorp's third this year, reflected primarily "lower than forecasted potash sales volumes, due to continued slow demand and limited restocking by fertilizer distributors around the world", the Canada-based company said.

The volumes of potash shifted were expected to slump 60% this year, implying sales of 5.1m tonnes, with the gross margin from nitrogen and potash on course to slump by 85%.

For the July-to-September period, PotashCorp forecast earnings "at the low end" of its guidance range of $0.80-1.20 a share.

Rebound ahead 

The warning comes amid a poor year for fertilizer groups, which have suffered steep drops in sales as falling crop prices and tight credit prompted cuts to farm budgets.

However, PotashCorp said that demand would return "in the new year".

"As farmers around the world begin the lengthy process of replenishing nutrients in the soil, we anticipate a new wave of demand growth that will allow us to once again demonstrate the full potential of our company," PotashCorp chief executive Bill Doyle said.

"Although there are fluctuations in fertilizer demand, there is an essential need for our products that is based on science."

The statement was made after the close of Toronto trading on Friday, when PotashCorp shares closed down Can$1.38 at Can$101.87.