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* Sees Q4 profit just above $2/shr, Street view $1.73/shr
* Strong North American fertilizer demand boosts results
* Agrium shares rise more than 3 pct on NYSE, TSX
By Euan Rocha
TORONTO, Jan 24 (Reuters) - Canada's Agrium Inc raised its fourth-quarter earnings outlook on Thursday as strong grain and oilseed prices spurred demand for its fertilizer products in North America over the fall season.
The Calgary, Alberta-based fertilizer maker, also the largest retailer of farm products in the region, said it now expects quarterly earnings of slightly more than $2 a share, excluding one-time items, sending its shares more than 3 percent higher in early trading.
Agrium, under pressure from activist shareholder Jana Partners to split its retail and wholesale arms and make other changes to improve returns, had forecast earnings of $1.50 to $1.90 a share for the period.
Analysts, on average, were expecting $1.73 a share, according to Thomson Reuters I/B/E/S.
Agrium is set to announce detailed fourth-quarter and full-year results on Feb. 22.
"Going forward, continued strength in crop prices and low global grain inventories are anticipated to support a strong spring application season in 2013," Chief Executive Mike Wilson said in a statement. He was referring to the early spring, when farmers begin to plant new crops.
Agrium is hosting an analyst day in New York on Jan. 28, when it is expected to provide a detailed review of its retail division.
Despite pressure from Jana, its largest shareholder, Agrium has refused to consider spinning off the retail arm. It says the business helps with cost savings and provides a wealth of market insight and an earnings buffer in a cyclical industry.
Jana, which has named a slate of nominees for election to Agrium's board, says the company has only addressed the split-up proposal, but not issues like cost controls and its concerns about capital allocation.
"Agrium's board has been living in an alternate universe where shareholders have no desire to explore the many ways we've identified to unlock value," Jana Managing Partner Barry Rosenstein said in a statement issued on Wednesday.
AltaCorp Capital analyst John Chu said Jana does make some valid points on the lack of agriculture and retail expertise on Agrium's board and the need to improve disclosure around the retail operations.
"However, we are still not fully convinced at this time that breaking out the retail division is necessary to realize these objectives," Chu said in a note to clients on Thursday.
Agrium rose 2.8 percent at $114.02 in New York, and its Toronto-listed shares added 3.3 percent to C$114.28. The stock has risen nearly 40 percent over the last 12 months.
Dundee Securities analyst Carolyn Dennis, who has a C$116 price target on the stock, believes Agrium's shares still have room to run.
"While our return to target has diminished, we continue to expect more upside at Agrium, primarily driven by the retail segment," Dennis said in a note to clients.