Agrium Profit Beats Estimates on Fertilizer Sales

Agrium Inc., North America’s third-largest fertilizer producer, reported fourth-quarter profit that beat analysts’ estimates as prices and demand for crop nutrients increased.

Net income surged to $158 million, or $1 a share, from $30 million, or 19 cents, a year earlier, the Calgary-based company said today in a statement. Earnings excluding stock-based compensation expenses, hedging gains and other one-time items were $1.38 a share, Agrium said. That topped the $1.15 average estimate of 22 analysts surveyed by Bloomberg.

Demand for fertilizers increased as corn, soybean and wheat prices advanced last year. The company’s sales rose 63 percent to $2.35 billion from $1.44 billion, beating the $1.86 billion average estimate of 14 analysts in the Bloomberg survey.

The results are “reflective of the current supply/demand fundamentals in fertilizer markets,” John Redstone, a Montreal-based analyst at Desjardins Securities Inc. who rates Agrium a “buy,” said in a note to clients.

Agrium rose C$2.75, or 3 percent, to C$95.65 at 4 p.m. in Toronto Stock Exchange trading. The shares have gained 48 percent in the past 12 months.

“Grain prices are high, providing farmers with all the needed incentives to maximize fertilizer application and yield,” Edlain Rodriguez, a New York-based analyst at Gleacher & Co., said yesterday in a note to clients.

Potash Prices

Potash, a form of potassium, climbed to $606 a ton at the end of 2010, 13 percent more than at the end of the previous quarter, according to a Bloomberg index of U.S. Midwest retail prices.

The company, in addition to mining potash, produces nitrogen- and phosphate-based fertilizers, and is the largest agricultural retailer to U.S. farmers.

“North American nutrient inventories are tight and are expected to remain so as we move into the spring season,” Agrium Chief Executive Officer Mike Wilson said today in the statement.

The company reiterated that its joint-venture nitrogen-fertilizer plant in Egypt hasn’t been affected by political turmoil in the North African country.

The MOPCO facility, in which it has a 26 percent stake, “has continued to operate and export at normal levels during the recent period of unrest, although this is not true for all Egyptian nitrogen facilities,” Agrium said in the statement. Progress also continues on tripling output at the plant, the company said.

Potash Corp. of Saskatchewan Inc. and Mosaic Co. are the largest fertilizer makers in North America.