Chile's SQM shares rally after cost cuts lead to earnings beat
SANTIAGO Nov 19 (Reuters) - Shares in fertilizer group SQM rose 3 percent at the open on Wednesday, after third-quarter earnings beat expectations on improved profit margins.
SQM, which also trades on the NASDAQ, on Tuesday evening reported core earnings up 4 percent, above market estimates, with profit margins rising to nearly 40 percent thanks to a weaker Chilean peso and greater cost efficiencies.
"We expect a positive reaction in the share price, due to stable results (despite) lower iodine and potash prices, showing SQM's high income diversification and its ability to continue reducing costs," said analysts at BICE Inversiones.
However, the brokers maintained their 'sell' on the stock, citing an uncertain outlook for iodine prices and a competitive market.
(Editing by W Simon)
© Thomson Reuters 2016 All rights reserved.