How many quarters have we had to hear from fertilizer and potash companies that the earnings results will be disappointing but good news is closer rather than farther away?  This has been the trend for about 9 months or so.  But now things may finally be changing for the sector.  Potash Corp. of Saskatchewan, Inc. (NYSE: POT) last night raised its guidance.  We have also seen CF Industries (NYSE: CF) and Terra Industries (NYSE: TRA) confirm a $4.7 billion merger.

Finally.  Fundamentals are catching up with share prices.

Potash Corp. said that earnings are now expected to be $1.30 to $1.50 EPS versus a prior guidance of $0.70 to $1.00 EPS which was provided on January 28, 2010. The reason for the higher guidance  was noted as being “a sharp rebound in potash demand that is expected to drive a record quarter for North American sales volumes and strong offshore shipments, as well as higher-than-expected margins in nitrogen and phosphate.”  Also noted was, “Strong farmer returns, a depleted distributor pipeline and the agronomic need to replace soil nutrients have kick-started a potash rebound from 2009 lows.”

CF Industries (NYSE: CF) has confirmed that it and Terra Industries (NYSE: TRA) have entered into a definitive merger agreement. Terra holders will receive $37.15 in cash and 0.0953 of a share of CF Industries common stock.  The boards of directors of both companies have approved the $4.7 billion combination, and Yara of Norway has backed away from its prior offer.