(Reuters) — Canada’s Agrium Inc. reported on Tuesday a steep drop in first-quarter profit, hurt by a colder than usual winter across North America and a drop in fertilizer prices.
As the cold weather caused transportation problems and delayed spring planting in some areas, net earnings from continuing operations for the first quarter fell to $12 million, or eight cents per share, from $146 million, or 98 cents per share a year ago.
“Agrium’s first quarter is traditionally our seasonally lowest earnings quarter and this was exacerbated this year by the record cold winter across North America,” Chief Executive Chuck Magro said. “However, farmer sentiment is positive this spring and we are now seeing good demand for crop input products and services.”
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Agrium forecast earnings of $3.85 to $4.35 per share for the busy second quarter, weakened by a March 22 outage at its Carseland, Alberta nitrogen facility. Analysts on average had expected $4.98.
The plant shutdown is likely to cut second-quarter availability of urea by about 130,000 tonnes, and of ammonia by about 30,000 tonnes.
Agrium is North America’s biggest retail seller of seed, fertilizer and chemicals directly to farmers and also produces nitrogen, potash and phosphate fertilizer. The frigid winter and a record-large Canadian harvest last autumn overwhelmed Canadian railways that also transport the potash Agrium produces.
Excluding one-time items, earnings from continuing operations were $11 million, or seven cents per share. On that basis, analysts on average had expected five cents a share in the first quarter, according to Thomson Reuters.
Sales eased two percent to $3.08 billion, topping expectations for $3.01 billion.
Agrium’s U.S.-listed shares edged higher to $96 after normal trading hours.
The Calgary, Alberta-based company warned in April that reduced railway availability and a late start to spring planting would hit its first-quarter earnings hard. Agrium estimated per-share earnings for the quarter ended March 31 at just above break even.
Agrium’s fertilizer rivals, Potash Corp. of Saskatchewan and Mosaic Co. — which sell potash overseas with Agrium through their jointly owned Canpotex — have also reported sharply lower quarterly earnings. Earlier on Tuesday, Mosaic posted a 43 percent drop in profit, due to weaker potash and phosphate prices, and said it would cut 500 jobs.
Agrium sold 876,000 tonnes of wholesale nitrogen products during the quarter, up 6 percent from a year ago, at an average selling price that was 16 percent lower, at $438 per tonne.
Domestic potash sales volumes climbed 47 percent to 292,000 tonnes due to pent up demand from the fourth quarter. However, international sales fell 24 percent to 136,000 tonnes because of difficulties moving potash to West Coast ports.
