(Reuters) - Canadian fertilizer company Agrium Inc (AGU.TO) (AGU.N) reported a lower quarterly profit on Wednesday due to slumping potash sales, and offered a weaker-than-expected outlook, sending its shares down nearly 7 percent.
Downtime at Agrium’s Saskatchewan potash mine and drawn-out contract talks with China and India hurt third-quarter performance, CEO Mike Wilson said.
In premarket trading, Agrium’s U.S.-listed shares dropped 6.7 percent to around $100. The stock was up 55 percent this year through Tuesday, helped by spiking grain prices due to the U.S. drought.
Rival Potash Corp of Saskatchewan (POT.TO) (POT.N) last month reported third-quarter earnings down 22 percent due to a standoff on new contracts with China and India. Agrium, Potash and Mosaic Co (MOS.N) sell potash from Western Canada to offshore markets through marketing agency Canpotex.
Agrium’s net earnings for the third quarter, ended September 30, fell to $129 million, or 80 cents per share, from $293 million, or $1.85 per share, a year ago.
Excluding one-time items, earnings were $1.34 per share. Analysts were expecting, on average, $1.82, according to Thomson Reuters I/B/E/S.
Sales for the company, North America’s biggest farm retail supplier of seed, chemicals and fertilizer, fell 6 percent to $2.96 billion, below analysts’ average forecast of $3.13 billion.
The Calgary, Alberta-based company, which produces nitrogen, potash and phosphate fertilizers, forecast fourth-quarter earnings of $1.50 to $1.90 per share, below analysts’ expectations of $2.10. (Reporting by Rod Nickel in Winnipeg, Manitoba; editing by John Wallace)