NEW YORK: Potash Corp. of Saskatchewan’s third-quarter earnings fell 22 percent as a standoff over new contracts led to a sharp drop in shipments to China and India, the world’s two biggest consumers of the company’s namesake crop nutrient.

The world’s biggest fertilizer maker said overseas potash shipments by North American producers dropped by a quarter to 1.9 million tons in the quarter. China accounted for just 12 percent of sales and India 5 percent.

“The weakness obviously is in China and India, but that shouldn’t be a surprise to anyone,” said analyst Spencer Churchill of Paradigm Capital.

Potash Corp, Agrium Inc. and Mosaic Co. conduct offshore potash sales from their mines in western Canada through the marketing agency Canpotex.

Analysts had expected Canpotex to renew supply contracts with China and India in late summer, but now they say it may take until late 2012 or early 2013.

China is seen as being well supplied with the crop nutrient for now, while a reduction in Indian subsidies and a weaker rupee have made potash more expensive for that nation’s farmers.

Both China and India are expected to negotiate price cuts.

Potash Corp. dialed back expectations for the fourth quarter. It forecast a full-year profit of $2.40 to $2.60 a share, compared with its Oct. 17 outlook of less than $2.80.

The implied fourth-quarter earnings outlook is 51 cents to 71 cents per share, excluding one-time charges, which is lower than analysts’ average forecast of 78 cents, Churchill said.

“Even at the top end of the range, they’d be lower than the Street,” he said.

Potash Corp. now estimates global potash shipments of 50 million to 52 million tons for 2012, down from its previous view of 53 million tons.

Several analysts have downgraded Potash Corp. shares this month, and half a dozen have reduced their price targets on the stock. At Wednesday’s close, shares of Potash Corp. had fallen 7 percent over the past month.

Analysts have also cut price targets for rival Mosaic, which missed expectations when it reported quarterly results on Oct. 2.

Potash Corp’s third-quarter net earnings fell to $645 million, or 74 cents per share, from $826 million, or 94 cents per share, a year earlier. Revenue was down 8 percent to $2.14 billion.

Analysts on average expected 75 cents per share, according to Thomson Reuters I/B/E/S.

The Saskatoon, Saskatchewan-based company said on Oct. 17 that it expected earnings at the low end of a range of 70 cents to 90 cents per share.

Potash Corp. said its record third-quarter potash shipments of 1 million tons in North America, helped by a speedy US harvest that encouraged farmers to bulk up on fertilizer for autumn applications, partly offset weaker offshore sales.

“The agricultural fundamentals that drive our business — rising food demand, supportive crop prices and the scientific need to replenish nutrients — remain strong despite some disruption in deliveries to offshore markets,” said Potash Corp. Chief Executive Officer Bill Doyle.

“We believe the nature of food production necessitates that fertilizer demand will return in all major markets.”

In total, Potash Corp. sold 2.1 million tons of potash during the quarter, down 4.5 percent from a year earlier.

Some analysts said the devastating US drought might cut into US potash applications in the fourth quarter, as disappointing crops left more of the nutrient in the soil.

But Potash Corp. said it expects fourth-quarter demand for potash in North America to rise from a year earlier.

The company has said it expects demand to rebound strongly in 2013, but that hinges largely on conditions in China and India, Barclays analyst Matthew Korn said in a note to clients.

“More focus on the uncertain potash demand outlook for 2013 should keep a headwind on stock performance,” he wrote.

Weaker margins on sales of crop nutrient phosphate further eroded Potash Corp’s third-quarter earnings. The company sold 18 percent less phosphate than it did a year earlier due to bad weather and production challenges, and prices were also down.

Prices of nitrogen rose, but Potash Corp’s sales of the nutrient fell 15 percent due to interruptions in n