UPDATE 2-Potash Corp's profit beats on higher potash sales; outlook misses

(Corrects 2014 potash sales in third last paragraph to 9.3 million tonnes)

By Sneha Banerjee and Rod Nickel

Jan 29 (Reuters) - Potash Corp of Saskatchewan , the world's biggest fertilizer company by market capitalization, reported higher-than-expected quarterly profit on strong potash sales, but its 2015 outlook disappointed.

Potash Corp's shares rose more than 3 percent Thursday in Toronto and New York, touching their highest level since May 2012 in Toronto. By mid-morning investors pared gains to less than 1 percent.

The company late on Wednesday increased its dividend by 9 percent to 38 cents per quarter.

Potash Corp sold 2.5 million tonnes of potash, the most ever in a fourth quarter and up 42 percent year over year. Its average realized potash price was $284 per tonne, up marginally from a year earlier.

Prices of the crop nutrient have been slow to recover since the breakup in mid-2013 of one of the world's biggest potash traders, Belarusian Potash Company, but softer prices have stimulated demand.

"I think all in all (Potash results) were pretty positive," said Robert "Hap" Sneddon, president of Ontario portfolio management company CastleMoore Inc, which manages Potash shares and sees the Toronto-listed stock climbing to at least C$55 this year from around C$46 currently.

Rival Mosaic Co forecast higher-than-expected fourth-quarter profit earlier this month, while Canadian fertilizer company Agrium Inc (Toronto: AGU.TO - news) said it would buy back shares and pay a larger percentage of free cash flow as dividends.

Potash Corp, the second-biggest potash producer by output after Russia's Uralkali OAO, reported fourth-quarter profit of 49 cents per share, beating the average analyst estimate of 46 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 23.4 percent to $1.90 billion, exceeding the average estimate of $1.67 billion.

The outlook for 2015 was mixed.

Potash Corp expects global potash shipments to range between 58-60 million tonnes in 2015, down from a record 61 million tonnes last year, due to weakening economic growth outside the United States and softer currencies relative to the greenback.

Potash Corp said it expected to sell 9.2-9.7 million tonnes of potash in 2015, compared with last year's 9.3 million tonnes.

The company expected full-year 2015 profit of $1.90 to $2.20 per share. The middle of that range, $2.05, fell short of analysts' average profit estimate of $2.12 per share.

For the first quarter, Potash sees earnings of 45 to 55 cents per share. Analysts were expecting 50 cents. (Reporting by Rod Nickel in Winnipeg, Manitoba and Sneha Banerjee in Bengaluru; Editing by Sriraj Kalluvila and Meredith Mazzilli)