(Reuters) - Agrium Inc, the Canadian fertilizer and farm retail dealer, on Thursday reported quarterly profit jumped nearly 9 percent, as higher sales volumes and lower costs helped it buck the sector’s trend of weaker earnings.
Weaker currencies in fertilizer-buying markets such as Brazil and India are weighing down prices, leading rivals Potash Corp of Saskatchewan and Mosaic Co to curb potash production amid falling sales and profits.
Agrium shares jumped about 2 percent in New York and Toronto, as its bigger-than-expected profit provided a rare bright spot in the slumping sector. Shares of U.S. nitrogen-producing peer CF Industries Holdings Inc, which on Wednesday reported a surprisingly large drop in profit, fell 7 percent in New York.
Agrium, North America’s biggest retail seller of seed, fertilizer and chemicals directly to farmers, narrowed its forecast for 2015 profit to $7.10 to $7.40 per share from $7.00-$7.50. The range’s midpoint remained $7.25 per share.
Agrium, which produces nitrogen, potash and phosphate fertilizer, said it benefited during the quarter from higher wholesale sales volumes, although prices were lower. Agrium is ramping up potash production at its expanded Western Canadian mine.
Agrium has focused on lowering operational costs and benefited from low costs of natural gas, a key ingredient in nitrogen fertilizer production.
Expenses fell nearly 10 percent to $505 million in the third quarter ended Sept. 30 from a year earlier.
The company’s net earnings from continuing operations rose 9 percent to $99 million, or 72 cents per share, helped by lower costs. Adjusted earnings of 71 cents beat analysts’ average estimate of 67 cents, according to Thomson Reuters I/B/E/S.
Sales fell 13.6 percent to $2.52 billion, lower than the $2.87 billion that analysts expected.
Reporting by Rod Nickel in Winnipeg, Manitoba and Sneha Banerjee in Bengaluru; Editing by Maju Samuel and Meredith Mazzilli