Agrium Inc. (AGU), operator of the largest U.S. network of agricultural retail outlets, rose the most in more than seven months after reporting fourth-quarter profit that exceeded analysts’ estimates.
Agrium, which sells seeds, fertilizers and herbicides to farmers, advanced 3.2 percent to C$114.35 at 10:24 a.m. in Toronto. Earlier the shares climbed as much as 4.1 percent, the most intraday since June 12.
Fourth-quarter profit excluding one-time items will be “slightly above” $2 a share, buoyed by demand for crop nutrients, Calgary-based Agrium said today in a statement. Agrium was expected to earn $1.71 a share, the average of 22 analysts’ estimates compiled by Bloomberg. In November the company, which also produces potash and nitrogen-based fertilizer, forecast $1.50 to $1.90 a share.
“The increase in our estimated financial results is due to a very strong finish to the fall application season in our North American Retail operations, supported by an extended fall season in the U.S. and continued strength in grain and oilseed prices,” Chief Executive Officer Mike Wilson said in the statement.
Last summer’s drought in parts of the U.S. raised concerns that farmers would reduce fertilizer purchases and instead rely on residual amounts of crop nutrients left over in the ground by scorched crops, said John Chu, a Toronto-based analyst at AltaCorp Capital Inc.
“The market likes this news,” Chu said today by telephone. “It implies it was business as usual for the fall fertilizer application season in North America and that potentially implies a normal spring season.”
The company plans to release its full fourth-quarter results on Feb. 22, according to the statement.
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