* Q2 EPS $3.20 vs $2.35 year ago
* Q2 revenue rises 7 pct to $4.37 bln
* Sees strong ag fundamentals supporting 2nd-half demand
* Agrium, Potash Corp shares jump on surge in wheat price
(Adds CEO comments, updates share price move; in U.S. dollars
By Euan Rocha
TORONTO, Aug 4 Fertilizer maker Agrium Inc
(AGU.TO) said second-quarter profit rose, driven by increased
demand for agricultural inputs, higher crop nutrient margins
and a jump in potash sales volumes.
Agrium, the largest North American farm products retailer,
also said it expects lower U.S. corn inventories and rising
grain prices to support demand for all crop inputs in the
second half of the year.
Quarterly profit rose to $506 million, or $3.20 a share,
from $370 million, or $2.35 a share, a year earlier.
The latest results include a pretax recovery of 26 cents a
share related to stock-based compensation and a pretax gain of
4 cents a share on natural gas and other hedge positions.
"The nitrogen and phosphates businesses did worse than I
was expecting, but the retail business did better than
expected," said Edlain Rodriguez an analyst with Gleacher & Co.
"That's the power of Agrium, they have the ability to offset
things because of the diversity of the business."
Net sales at the Calgary-based company rose 7 percent to
$4.37 billion, driven largely by higher potash sales volumes,
which soared to 529,000 tonnes from 61,000 tonnes a year
Analysts on average had expected earnings of $2.77 a share
on revenue of $4.17 billion, according to Thomson Reuters
The global recession and a collapse in grain prices hurt
fertilizer demand in 2009, but farmers have begun to restore
their soil nutrient levels this year, benefiting Agrium and
Last week, Potash Corp (POT.TO), the world's largest
fertilizer producer, said its second-quarter profit more than
doubled as sales volumes quadrupled, offsetting lower prices
for the crop nutrient. [ID:nN28198150]
OPTIMISTIC ON DEMAND
"We anticipate North American crop nutrient demand to be
strong in the second half at both the grower and retail level,"
said Agrium's Chief Executive Mike Wilson, citing firming crop
prices, weather-induced constraints on nutrient application
this spring, among other reasons.
Wilson, on a conference call, also noted that feedback from
Agrium's extensive retail operations indicate that crop
nutrient inventories at North American retailers are very low
for all products and that major restocking will be required
The company said it plans to issue its outlook for the
second half of the year when it releases third-quarter
Shares of Agrium and those of its larger rival Potash Corp
were the biggest net gainers on the Toronto Stock Exchange on
Wednesday, driven largely by a surge in wheat and corn
Wheat futures rose to a 22-month high as a drought
conditions worsened in the Black Sea region and the United
Nation's food agency cut its global wheat forecast by 4
Shares of Agrium rose 3.6 percent to close at C$67.41 on
the Toronto Stock Exchange, while those of Potash Corp rose 4
percent to close at C$113.13 on Wednesday.
Shares of U.S. rivals Mosaic (MOS.N) and CF Industries
(CF.N) also rose 4.8 percent and 2.2 percent, respectively on
the New York Stock Exchange.
(Reporting by Euan Rocha in Toronto and Savio D'Souza in
Bangalore; Editing by Gopakumar Warrier, John Wallace and