By Rod Nickel
May 9 Agrium Inc , the Canadian
fertilizer company, reported lower quarterly profit on Thursday,
as cold, wet spring weather delayed plantings in the United
States, and forecast weaker-than-expected earnings for the
U.S. plantings of corn, a fertilizer-intensive crop, were
just 12 percent complete as May 5, the slowest pace since 1984,
the U.S. Department of Agriculture said on Monday. However more
favorable weather was expected.
Agrium Chief Executive Mike Wilson said farmers have a
shortened spring season for applying fertilizer, but still
expects strong demand for crop inputs in the first half.
"It seems (they're) trying to be a bit cautious given the
late planting in the U.S.," said John Chu, analyst at AltaCorp
Capital. "The risk can be if farmers switch from planting corn
to soybeans, which is a pretty big switch in the amount of
nitrogen that's going to be used."
Along with selling products to farmers, Calgary,
Alberta-based Agrium is a major producer of nitrogen and potash
Agrium, which recently fended off its largest shareholder,
Jana Partners, in a proxy battle over its retail division, said
it expects a second-quarter profit of $4.60 to $5.40 per share.
The midpoint of that range is $5, lower than the average analyst
expectation for $5.29.
The company also said it would buy back up to 5 percent of
Agrium's shares edged higher in light New York trading
before normal hours to $94.41. For the year, the stock is down
nearly 6 percent in New York and over 4 percent in Toronto, as
of Wednesday's close. It touched a record high in late January.
First-quarter net earnings fell to $141 million, or 94 cents
per share, from $155 million, or 97 cents per share a year
earlier, while revenue dropped 10 percent to $3.224 billion.
Adjusted earnings, not counting a $16 million share-based
expense, were $153 million, or $1.03 per share. Analysts, on
average, expected $1.07 on sales of $3.465 billion, according to
Thomson Reuters I/B/E/S.
Retail sales to farmers fell 13 percent to $2.1 billion.
Wholesale sales of nitrogen, potash and phosphate fertilizer
slipped to $1.1 billion from $1.2 billion. Realized prices for
ammonia, nitrates and nitrogen solutions were stronger year over
year, while urea prices were in line, and potash and phosphate
Rival U.S. fertilizer producer CF Industries Holdings Inc
on Wednesday reported higher quarterly profit due to
one-time items, but sales of nitrogen and phosphate fell.
Potash Corp of Saskatchewan, which, like Agrium,
mines potash in Western Canada, reported higher quarterly profit
Agrium expects regulatory approval for its purchase of most
of Viterra Inc's farm retail stores in Canada and Australia late
in the second quarter or early in the third period. Viterra is
owned by Glencore Xstrata PLC.