Agrium Q2 Profit Down 13% Despite Higher Sales

(RTTNews) - Canadian fertilizer company Agrium Inc. (AGU, AGU.TO) on Wednesday reported a 13 percent decline in profit for the second quarter from last year despite higher sales.

Agrium noted that the cold, wet weather experienced in North America this spring resulted in a compressed spring application season. The company also recorded lower sales prices for urea, potash and phosphate in the latest quarter.

Agrium's retail sales for the second quarter increased 7 percent from the year-ago period to $5.56 billion, reflecting the return to a more regular seasonal crop input demand for the latest quarter, compared to the exceptionally early planting season experienced in 2012.

Wholesale sales decreased 9 percent to $1.50 billion, caused by lower realized sales prices for urea, potash and phosphate as a consequence of global market pressures combined with an unplanned outage at the company's Redwater nitrogen facility.

Advanced Technologies sales rose 16 percent to $207 million, largely due to the strength of Environmentally Smart Nitrogen or ESN volumes and margins.

Agrium's net earnings for the second quarter were $747 million or $5.02 per share, down from $860 million or $5.44 per share in the prior-year quarter.

The latest quarter's results included a pre-tax share-based payments recovery of $0.15 per share, pre-tax proxy defense costs of $0.06 per share, and a pre-tax loss on natural gas and other hedge positions of $0.01 per share.

Excluding these items, adjusted net earnings for the quarter were $736 million or $4.94 per share. On average, twenty one analysts polled by Thomson Reuters expected the company to report earnings of $4.98 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter rose 4 percent to $7.02 billion from $6.77 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $6.98 billion for the quarter.

Looking ahead, Mike Wilson, Agrium President and CEO said, "We expect solid demand for crop inputs in the second half of 2013 given positive grower sentiment, strong nutrient removal this year and the affordability of crop nutrients."

Agrium said that as of July 31, 2013, it has purchased about 2 million of its own shares at an average price of about $88 per share for total consideration of approximately $179 million under its normal course issuer bid or NCIB.

Under the NCIB entered into on May 14, 2013, Agrium may purchase for cancellation up to approximately 7.5 million of its currently issued and outstanding common shares until May 20, 2014.

AGU closed Wednesday's regular trading session at $83.05, up $1.40 or 1.71 percent on a volume of 1.52 million shares.