UPDATE 2-Fertilizer dealer Agrium profit beats Street estimates

Wed Aug 6, 2014 9:11pm EDT

* Q2 adj. profit $4.37/share vs estimates of $4.11/share

* Shares rise 2 pct

* Q2 sales up 6 pct to $7.34 billion

* Q2 retail sales up 15 pct (Adds background on halting production, share movement)

Aug 6 (Reuters) - Canadian fertilizer and farm retail dealer Agrium Inc's second-quarter profit beat Wall Street estimates as it gained from the inclusion of sales from Viterra Inc's retail centers.

Agrium's U.S.-listed shares rose 2 percent to $94 in after-hours trading.

Agrium completed the acquisition of Viterra's assets in Canada in October and acquired 13 locations in Australia in June.

The biggest U.S. retail seller of fertilizer, chemicals and seed reported a 15 percent increase in retail sales to farmers to $6.4 billion in the second quarter.

Excluding one-time items, second-quarter profit was $4.37 per share, above analysts' estimates of $4.11 a share, according to Thomson Reuters I/B/E/S.

Sales for the quarter rose 6 percent to $7.34 billion, above analysts' expectations of $7.18 billion.

Agrium, which also produces nitrogen, potash and phosphate fertilizer, sold 906,000 tonnes of wholesale nitrogen products in the quarter, 18 percent below last year, as a result of unplanned outage at its Carseland, Alberta nitrogen facility, which resulted in a loss of 158,000 tonnes of production and a planned turnaround at the Fort Saskatchewan facility.

Agrium's average selling price for nitrogen fell to $464 per tonne from $582 per tonne a year ago.

Wholesale nitrogen gross margins fell to $111 per tonne in the quarter, from $267 per tonne as a result of lower prices, outages and higher costs of natural gas, a key input in nitrogen fertilizer production.

Rival nitrogen producer CF Industries said earlier on Wednesday that its second-quarter profit fell 37 percent as it also faced higher costs for natural gas and lower prices for its biggest-selling products.

Agrium sold 566,000 tonnes of potash in the second quarter, above 544,000 tonnes sold in the year-ago quarter.

Lower sales prices, however, weighed on potash gross profit, which dropped 40 percent to $72 million in the quarter.

Wholesale sales of nitrogen, potash and phosphate fertilizer fell 25 percent to $1.2 billion as a result of lower realized prices for the products.

The Calgary, Alberta-based company has coped with unexpected downtime this year at several facilities.

Last Thursday, the company halted production at its lone potash mine, Vanscoy, due to a mechanical failure on its main hoist system at the underground mine in the Western Canadian province of Saskatchewan.

Agrium's second quarter net earnings fell to $625 million, or $4.34 per share, from $744 million, or $5 per share a year ago.

Fertilizer rivals Potash Corp of Saskatchewan and Mosaic Co - which are partners in selling potash abroad through the jointly owned Canpotex - reported sharply lower quarterly earnings last month due to low potash prices. (Reporting By Rod Nickel in Toronto and Kanika Sikka in Bangalore; Editing by Chris Reese, Bernard Orr and Ken Wills)

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