Yara International (YARIY.PK) reported stinko revenue and earnings numbers for the third quarter of 2009 on October 21. Net income per share, for example, fell by a little more than 88% from the third quarter of 2008.

So this was exactly the kind of kitchen sink quarter I was looking for when I last updated this stock on October 5. Included in the huge drop in net income per share, for example, were end-of-the-cycle items such as a $26 million write down of potash inventories.

I look for kitchen-sink quarters because companies tend to deliver these huge lets clear-out-all-the-bad-news quarters because they can see the business cycle turning. I think that’s the case for Yara International.

 Delivery volumes rose 10% from the third quarter of 2008 and while, potash prices are likely to fall about $60 or so per ton, prices for other kinds of fertilizer seem to have stabilized and in some cases—nitrogen, for example—are near a turn as demand has caught up with supply. Yara International reported that global utilization rates in the nitrogen industry are within 1% to 3% of industry capacity. If that’s accurate, it will take only a small increase in demand to push prices higher.

I’m still looking for a general recovery in the fertilizer industry in 2010—either by the turn of the year for potash or by the end of the first quarter for other fertilizers. (For more on the fertilizer industry see my update to Potash of Saskatchewan (POT), my other fertilizer Jubak’s Picks https://jubakpicks.com/the-jubak-picks/#POT-description )

 Yara International hit my target price of $37 a share by September 2010 just a bit early—in November 2009. As of November 16, 2009, I’m keeping the stock in Jubak’s Picks and raising the target price to $47.20 a share by November 2010.

Full disclosure: I own shares of Yara International in my personal portfolio.