* Plans $500 million a year in cost cuts by 2020
* No details given of cuts; some analysts sceptical
* Shares up 6.2 pct
* Q2 earnings below forecasts (Writes through, adds CEO, share, analysts)
By Gwladys Fouche and Ole Petter Skonnord
OSLO, July 21 (Reuters) - Shares in fertiliser maker Yara International soared on Thursday despite posting below-forecast second-quarter earnings as it announced plans to cut costs by $500 million a year by 2020.
The company gave no details of where the savings would come from. Some analysts said the savings goal, representing about 5 percent of Yara's cost base, was feasible and could come from areas such as staff cuts and shaving the cost of supplies, but others were sceptical it could achieve cuts on this scale when the vast majority of its costs were on energy.
Yara, the world's largest producer of ammonia, nitrate and complex fertilizer, had previously said it was looking to cut costs, but it was the first time the company had given a figure, which was more than its core earnings for the quarter.
Over the past year, the firm's stock has fallen 29 percent, lagging the global agricultural chemicals index , which is down 23 percent.
Fertiliser makers have been hit by low prices, with the economic downturn in Brazil, a major agricultural producer, dampening demand there and oversupply due to decisions to expand production capacity taken when prices were higher.
After Thursday's cost-cutting announcement, Yara stock was up 6.2 percent at 1311 GMT and was the third-best performer on the European Stoxx 600 Index, down 0.33 percent.
"We have so far identified at least $500 million of annual improvement potential," Chief Executive Svein Tore Holsether said in a statement, adding that these would be fully realised by 2020.
Yara said it would give more specifics about the cuts in the coming quarters, with a detailed presentation when the firm presents its fourth-quarter earnings early next year.
"At this stage, we felt the number was of such significance that it should be communicated," Holsether said during a presentation. "We will get back to the details on where do we see the potential and how it will be phased in."
Yara reported earnings before interest, taxes, depreciation and amortisation, excluding one-offs, of 3.96 billion crowns ($467.03 million) in the quarter, below analysts' forecasts for 4.04 billion in a Reuters poll, and down from 5.06 billion a year earlier.
The results were driven by lower fertiliser prices, with average urea and nitrate fertilizer prices down around 25 percent, but were offset by the appreciation of the U.S. dollar against the Norwegian crown and the 33 percent lower cost of gas, Yara said. Producing fertiliser is energy-intensive.
Massimo Bonisoli, an analyst at Equita SIM bank, said cutting 4.5 percent of total costs over four years looked feasible. He expected procurement, staff, optimising assets in Latin America and the distribution network to be the main sources of savings.
Analysts at brokerage Norne Securities were more cautious, saying 65 to 70 billion crowns of Yara's 80 billion crown cost base were energy costs, which were difficult to cut.
"What is left is only 10-15 billion crowns and it seems close to impossible that all or even half of the programme comes from there," said Norne, adding that the savings were likely to involve restructuring costs.
Norne, which has a "sell" recommendation on Yara and a target price of 250 crowns, said in a note to clients however it was "positively surprised" by Yara's cost-cutting ambition and was revising both its recommendation and target price. ($1 = 8.4791 Norwegian crowns) (Editing by Adrian Croft)