Nov. 4 (Bloomberg) -- Agrium Inc., the fertilizer producer seeking to take over CF Industries Holdings Inc., said third- quarter profit fell 93 percent as prices and demand declined.

Net income dropped to $26 million, or 16 cents a share, from $367 million, or $2.31, a year earlier, Calgary-based Agrium said today in a statement. Excluding some items, profit was 29 cents a share. The average estimate of 13 analysts surveyed by Bloomberg was for 19 cents.

Chief Executive Officer Michael Wilson said the company expects a “significant recovery” in demand for all crop inputs starting in 2010 after lower corn prices and uncertainty over potash pricing hurt results this year. Agrium last month said profit in the third quarter dropped as much as 95 percent from a year earlier.

“Investors are correctly focusing on next year,” Edlain Rodriguez, an analyst at Broadpoint AmTech in New York, said today in an interview. He rates the shares “buy.”

Agrium said fourth-quarter earnings will be 14 cents to 44 cents a share. That’s less than the 53 cents expected on average by eight analysts surveyed by Bloomberg.

Agrium fell 8 cents to C$51.23 at 4:10 p.m. in Toronto Stock Exchange trading. The shares have gained 24 percent this year.

Fourth-Quarter Forecast

Wet, cold weather that has slowed the fall harvest may reduce U.S. demand for fertilizer and other crop products such as fungicide, the company said.

“Any further significant deviation from normal weather patterns could cause our results to be outside the guidance range,” Agrium said.

Agrium repeated its commitment to acquiring Deerfield, Illinois-based CF Industries and its willingness to increase its offer of $40 in cash plus one U.S. dollar-denominated Agrium share if CF can show why the company is worth more.

CF, which has rebuffed Agrium’s advances, is attempting to acquire rival nitrogen-fertilizer producer Terra Industries Inc. Terra today rejected CF’s latest offer as “inadequate.”

A combination of any two of the three companies would create the world’s second-largest publicly traded nitrogen- fertilizer producer after Yara International ASA of Norway, company executives have said.

Agrium’s sales in the third quarter fell 41 percent to $1.84 billion, topping the $1.83 billion expected by six analysts in the Bloomberg survey.

Third-quarter results included a gain of 2 cents a share on derivatives, and expenses of 11 cents for stock-based compensation and 4 cents to write down inventory.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

Last Updated: November 4, 2009 16:21 EST