CALGARY — Agrium Inc. (TSX:AGU), a major fertilizer, chemicals and farm inputs retailer, reports its net profits more than doubled in the latest quarter on higher revenues and solid industry fundamentals.
The Calgary company said Wednesday its net earnings rose to US$57 million or 37 cents a share in the third quarter ended Sept. 30. That compared with earnings of $26 million or 16 cents a share for the same period last year.
Revenues for the quarter rose to more than $2 billion from $1.8 billion.
The company, which reports in U.S. dollars, said third quarter results included a pre-tax expense of $85-million on stock-based compensation and pre-tax gains of $10-million on natural gas and other hedging contracts.
Excluding these items, Agrium’s net earnings would have been $111-million or 70 cents a share for the quarter. Analysts polled by Thomson Reuters were on average expecting earnings of 92 cents per share.
Shares in the company were down in afternoon trading on the Toronto Stock Exchange, falling $2.04 or 2.3 per cent to $85.96.
“We believe the outlook for Agrium’s products and businesses are as good as they have ever been, supported by excellent fundamentals for the agricultural and crop input markets,” said Mike Wilson, Agrium’s president and CEO.
“While EBITDA from our retail operations this quarter was almost double last year’s level and wholesale’s rose by more than 60 per cent, we expect the improvements in the crop input markets to become even more evident in the fourth quarter of 2010. Furthermore, we anticipate the strength in crop input demand and prices to continue into the spring of 2011, benefiting all three of our strategic business units.”
In the current fourth quarter, Agrium said it expects to earn a profit ranging from US$1 to $1.30 a share as fertilizer prices remain strong.
Calgary-based Agrium (TSX:AGU) produces the three main types of fertilizer: nitrogen, phosphate and potash. It also sells farm products at various retail outlets across North America. The company also operates in South America and elsewhere.
Over the summer, Agrium offered $1.1-billion to buy Australian grain marketer AWB Ltd. Australian regulators have approved the deal, and now it’s up to shareholders to give it the green-light.
Agrium, along with Potash Corp. of Saskatchewan (TSX:POT) and Mosaic Co. (NYSE:MOS), sells its potash supplies on the world market through a jointly-owned agency called Canpotex.
The future of Canpotex has been called into question since Australian mining giant BHP Billiton launched a hostile US$38.6-billion bid for Potash Corp. this summer. BHP has signalled it would leave the cartel if it is successful in its takeover of Potash Corp.
Last year, Agrium found itself entangled in a complicated three-way takeover battle, dubbed “fertilizer wars” by many observers.
In March, the company walked away from its year-long quest to take over U.S. nitrogen producer CF Industries Holdings Inc., which instead ended up acquiring U.S. rival Terra Industries Inc.