Agrium Slips To Loss In Q3; Cuts 2016 Profit View

(RTTNews) - Agrium Inc. (GU, AGU.TO) reported that its third quarter net loss attributable to equity holders of the company was $41 million or $0.29 per share compared to net earnings of $101 million or $0.72 per share in the third quarter of 2015.

The reduction in net result was hurt by lower year-over-year nutrient pricing, low pest and disease pressure in the U.S. which limited the demand for crop protection products and application services this growing season, a delayed harvest across North America related to wet weather, and one-time costs primarily related to the proposed merger with PotashCorp.

Third quarter adjusted net loss was $17-million or $0.12 loss per share. Adjusting for non-operational legal costs, guidance relevant earnings would be a loss of $4-million or $0.03 diluted loss per shareholder.

Sales for the quarter dropped to $2.245 billion from $2.524 billion in the prior year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.11 per share and revenues of $2.40 billion. Analysts' estimates typically exclude special items.

"... Looking out for the rest of the year, we expect solid demand for crop nutrients; however, growers have experienced poor fall weather in Canada and pockets of the U.S. which has impacted harvest progress and ammonia applications," Chuck Magro, Agrium's President and CEO.

Agrium expects to achieve annual earnings per share of $4.60 to $5.00 in 2016 compared to previous forecast of $5.00 to $5.30. Analysts expect annual earnings of $5.10 per share. It has lowered annual guidance range due to the persistent weakness in global nutrient prices, and low demand for crop protection products and application services during the third quarter. Notwithstanding the current weather issues in Western Canada, our outlook for the fourth quarter is predicated upon a strong North American fall season driving high fertilizer application rates.

The lower end of nitrogen production guidance was increased to 3.6 million tonnes due to higher plant utilization rates while our estimate for potash production was lowered between 2.1 and 2.2 million tonnes.

The company reiterated the range for Retail crop nutrient sales tonnes at between 9.8 million to 10.2 million tonnes while lowering the Retail EBITDA range between $1.07-billion and $1.11-billion.