* Q1 net loss $0.38/shr vs EPS $1.23
* EPS $0.04 excluding items, vs forecast $0.29
* Shares down 1.2 percent (Adds analyst comments, details; in U.S. dollars unless noted)
By Euan Rocha
TORONTO, May 6 (Reuters) - Agrium Inc (AGU.TO) posted a quarterly net loss on Wednesday, as the agricultural supplies company was hit by one-time items along with a slump in demand for its potash, nitrogen and phosphate fertilizers.
Calgary, Alberta-based Agrium, which has launched a hostile bid for U.S. rival CF Industries (CF.N), posted a loss of $60 million, or 38 cents a share, down from a year-earlier profit of $195 million, or $1.23 a share.
The latest results were hit by one-time items including natural gas and power hedge losses, stock-based compensation expenses and an inventory writedown within its wholesale business.
Excluding items, the company posted a profit of 4 cents a share, well below analyst forecasts of 29 cents a share.
Morningstar analyst Ben Johnson expects North American demand for fertilizer to return to more normal levels as corn planting activity begins to pick-up.
"But, again, I don't think the type of unit margins that we saw in 2008 are going to be revisited any time in the foreseeable future," Johnson said.
The first-quarter is a seasonally slower period for the agricultural sector, but farmers hurt by lower grain prices and a tighter credit environment have also cut back spending on crop nutrients in a bid to lower costs.
Last month, Potash Corp of Saskatchewan (POT.TO), the world's biggest fertilizer company, reported a 46 percent drop in first-quarter profit and lowered its full-year outlook in anticipation of a slower recovery in demand.
Excluding items, Agrium expects second-quarter earnings of $2 to $2.40 a share. On that basis, analysts polled by Reuters Estimates expect average earnings of $2.61 a share.
"Retail crop nutrient margins were impacted by the significant decline in nitrogen and phosphate prices in the fourth quarter of 2008, but we expect our margins will recover as we move through the spring season," Agrium's Chief Executive Mike Wilson said in a statement.
Analysts expect demand for nitrogen fertilizers to rebound this spring as the North American planting season, which has been delayed in many areas due to excessive rainfall, finally begins to get under way. But analysts are not as confident about a pick-up in demand for potash and phosphate fertilizers.
"Our estimate of a 40 percent year-over-year decline in U.S. potash consumption in the 2008-09 fertilizer year (July-June) could prove to be low, if potash applications continue to be deferred until the next season," Bank of America/Merrill Lynch analyst Steve Byrne, said in a note to clients.
The brokerage also expects U.S.-based phosphate fertilizer producers may need to reduce operating rates during the summer months, if demand in the U.S. cornbelt does not improve sharply in the near term.
However, Agrium expects crop nutrient demand will pick up in the second-half of 2009 as farmers who have delayed applications will be forced to replenish soil nutrient levels, to ensure strong yields.
"In (crop) nutrient demand this spring, we are seeing a reduction in demand. But, if you look on a calendar year basis, a lot of this reduction is simply a deferral that they (farmers) are going to have to put on in the second-half," Agrium's Wilson said in an interview with Reuters.
Agrium said sales in the first-quarter rose 54.6 percent to $1.80 billion from a year earlier, driven primarily by gains from its acquisition of agricultural products retailer UAP Holding.
The company reiterated that it remains committed to acquiring CF Industries and is prepared to increase its offer if CF can demonstrate additional value.
Agrium shares, which have risen almost 30 percent so far this year, were down 1.2 percent at C$53.00 on the Toronto Stock Exchange on Wednesday afternoon. (Reporting by Euan Rocha and Andrea Hopkins; Editing by Derek Caney and Maureen Bavdek)