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Agrium Profit Trails Estimates After Weather Slows Planting

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May 9 (Bloomberg) -- Agrium Inc., the largest U.S. farm-products retailer, reported first-quarter profit and sales that trailed analysts’ estimates after cold weather slowed planting by farmers.

Net income declined to $141 million, or 94 cents a share, from $153 million, or 97 cents, a year earlier, Calgary-based Agrium said today in a statement. Profit excluding share-based payments was $1.03 a share, missing the $1.08 average of 24 estimates compiled by Bloomberg. Sales dropped to $3.22 billion from $3.57 billion, less than the $3.47 billion average of 19 estimates.

“With corn planting the slowest since 1984, prices are under pressure as some farmers delay or defer purchases” of fertilizer, Jason Miner, an analyst at Bloomberg Industries in Princeton, New Jersey, said in a telephone interview before Agrium released its results.

The shares rose 0.6 percent to C$95.61 in Toronto. Agrium said its board authorized a buyback of as much as 5 percent of the company’s stock.

Agrium’s sales from its retail network fell 13 percent to $2.1 billion, “largely due to colder weather and a more typical spring season compared to a historically early spring season in the same last year,” the company said in the statement. The spring planting season began about a month earlier than usual last year.

Lower Prices

“The continuation of cold, wet weather in April is likely to result in a somewhat compressed spring application season this year,” according to the statement. “However, we still expect excellent demand for crop inputs in the first half of 2013 given positive grower sentiment and the strength in the agricultural fundamentals.”

Earnings in the first quarter were hurt by lower prices for potassium and phosphorus crop nutrients. Agrium sold potash, a form of potassium, on average for $404 a metric ton, down from $497 a year earlier, according to the statement. The average phosphate price fell 11 percent to $698 a ton from a year earlier.

The company forecast second-quarter profit excluding derivative gains or losses of $4.60 to $5.40 a share. That compares with the $5.28 average of 21 estimates compiled by Bloomberg.

The first-quarter results come a month after Agrium fended off a challenge from dissident shareholder Jana Partners LLC, a New York-based hedge fund. Agrium investors rejected five Jana-sponsored board nominees at the Canadian company’s annual meeting in Calgary.

CF Industries Holdings Inc., the largest U.S. maker of nitrogen fertilizer, yesterday posted first-quarter profit that beat analysts’ estimates as some nutrient prices rose amid expectations for increased corn planting.

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

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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