Tuesday, February 8, 2011

Agrium Inc. (NYSE: AGU): Q4 Earnings Preview 2010

Agrium Inc. (NYSE: AGU), North America’s third- largest fertilizer maker by market value, is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, February 9, 2011. Analysts, on average, expect the company to report earnings of $1.14 per share on revenue of $1.87 billion. In the year ago quarter, the company reported earnings of 19 per share on revenue of $1.44 billion.

Agrium Inc., together with its subsidiaries, produces and markets agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South Americas.

In the preceding third quarter, the Calgary, Canada-based company's net income was $57 million or $0.37 per share compared to $26 million or $0.16 per share in 2009. On an adjusted basis, the company earned $111 million or $0.70 per share for the third quarter of 2010. Revenue rose to $2.01 billion from US$1.84 billion in the prior year quarter. Analysts, on average, expected the company to report earnings of $0.87 per share on revenue of $2.10 billion.

Agrium expects earnings to be in the range of $1.00 to $1.30 per share, excluding estimated hedging gains or losses and stock-based compensation expense in the fourth quarter.

Fertilizer demand continues to strengthen and market segment sentiment has improved due to the rally in grain prices, lean producer inventories and the need to refill a de-stock pipeline.The broad-based rally in agricultural commodity prices translates into profitable farm economics and record or near-record farm income around the world. Rallies in a broad array of agricultural commodity prices during the last few months are fueling an increasingly positive outlook for phosphate and potash demand. Phosphate prices have increased sharply. Growth in China, India, Brazil and other emerging areas around the globe are creating demand. An improving agricultural picture, visibility with pricing, and the fear of inflation could all boost fertilizer stocks higher.

Agrium anticipates the strength in crop input demand and prices to continue into the spring of 2011, benefiting all three of our strategic business units.

In December, the company agreed to sell the commodity management business it acquired as part of its A$1.24 billion purchase of Australia's AWB Ltd to U.S. agribusiness and trading giant Cargill Inc.

Full Disclosure: None.
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