* Q4 adjusted net profit $293.4 mln vs $266.6 mln forecast
* Revenue $1.421 bln vs $1.457 bln forecast
* To pay dividend of $170 mln, same as in Q3
(Adds analysts' comments, share price reaction)
By Tova Cohen
TEL AVIV, March 28 (Reuters) - Fertiliser and specialty chemicals maker Israel Chemicals (ICL) (ICL.TA) reported a higher-than-expected rise in adjusted fourth-quarter net profit on rising demand for potash and its fire resistant chemicals.
Strong points in the quarter were external sales of 1.326 million tonnes of potash at $381 million per tonne, both figures above estimates, analysts said.
Though ICL's revenue was slightly below estimates, prices for potash continue to rise and therefore the fourth quarter is not an indication for future performance, said Gilad Alper, an analyst at the Meitav brokerage.
"The important parameter to consider is the price of corn, which is currently trading close to a very high $7 per bushel," he said. ICL is the world's sixth-largest potash producer.
It is also the world leader in brominated flame retardants-- fire resistant chemicals used for consumer products -- for the electronics industry and benefited in 2010 from a resurgence in demand for consumer electronics, cars and building supplies as well as a lower quantity of bromine produced by China.
ICL's industrial division, which includes bromine, posted an operating profit margin of 19.3 percent, the highest since 2007, Alper said.
"This impressive figure was the result of strong volumes and strong prices, which are expected to continue to drive the performance of the sector," Alper said.
Shares in ICL were down 0.4 percent at 1001 GMT slightly outpacing dclines in the broader Tel Aviv market.
Canada's Potash Corp (POT.TO), the world's largest fertiliser producer, owns 13.9 percent of ICL.
ICL posted quarterly net profit of $245.4 million, up from $202.7 million a year earlier. Excluding one-off charges, adjusted net profit rose 38 percent to $293.4 million.
Revenue rose 16 percent to $1.421 billion, a record for the fourth quarter, reflecting increased quantities sold by all of ICL's segments to all markets. This compensated for the reduction in the price of potash and some other products as well as the weakening of the dollar against the euro and pound.
The second-largest company on the Tel Aviv exchange with a market value of $21 billion, ICL was forecast in a Reuters poll to earn $266.6 million on revenue of $1.457 billion.
In 2010, ICL sold 5.6 million tonnes of potash, up 105 percent from 2009.
When fertiliser demand declined due to the economic crisis in 2008-2009, ICL said it created record potash inventory of 3 million tonnes and then drew down from this in 2010 to supply increased demand generated by recovering markets.
"ICL is finishing off an excellent year with a quarter that is no less excellent," Amir Adar, head of sell-side research at Migdal Capital Markets, said.
The company, a subsidiary of Israel Corp (ILCO.TA), said it would pay a dividend of $170 million on May 12, the same as in the third quarter.
ICL said a workers' strike at its fertilisers unit in the first quarter of 2011 would not substantially affect its ability to meet its sales plan for 2011. (Editing by Mike Nesbit)