Potash Corporation of Saskatchewan Inc. cut its earnings forecast for 2008 Friday as sagging fertilizer demand conspired to chop the company's financial fortunes.

Saskatoon-based Potash now says it will make about $10.75 US a share for 2008. That result still represented a whopping 200 per cent plus jump in its earnings per share compared to 2007's $3.40.

But, earlier in the year, Potash had been expecting to make somewhere in the range of $12 to $13 a share. A slowing global economy is to blame, the company said.

"Like every other industry, agriculture has felt the impact of the global financial downturn," said Potash's president and chief executive officer Bill Doyle.

In terms of sales volume, Potash now expects to produce less than nine million tonnes of material, a reduction compared to 9.2 million in 2007.

Earlier in the year, Potash forecast production to either stay at the same level as 2007 or exhibit growth of a modest five per cent.

Similarly, prices appeared to be experiencing some temporary softness. The price per tonne for potash stood at $869 US in October and remained firm into November.

Three month stock chart for Potash Corporation of Saskatchewan Inc.

Still, "lower prices and margins in our nitrogen and phosphate segments" contributed to the company's reduced financial outlook, Doyle said.

Potash had already announced that it would scale back material production by two million tonnes starting in January.

But, in the longer term, the company — and most analysts — believe potash supply constraints combined with higher food production in countries, such as China, will drive potash prices higher in coming years.

Still, Potash's profit warning capped off an up-and-down year in which the company boosted profits and revenue by triple digit growth. But Potash saw its market capitalization reduced substantially as the slowing global economy chopped the company's outlook.