May 4, 2011 / 11:42 AM / in 7 years

UPDATE 2-Agrium Q1 profit beats on strong fertilizer prices

* High crop prices boost fertilizer demand

* Shares expected to rise (Adds analyst’s comment, details. In U.S. dollars unless noted)

WINNIPEG, Manitoba, May 4 (Reuters) - Canada-based farm products retailer and potash miner Agrium Inc (AGU.TO) posted a quarterly profit that beat expectations on Wednesday, buoyed by higher fertilizer prices.

Agrium, the largest North American farm products retailer, posted consolidated net income of $171 million, or $1.09 per share, compared with a net loss of $1 million, or 1 cent a share, a year earlier.

Analysts on average had forecast earnings of 92 cents a share on revenue of $2.35 billion, according to Thomson Reuters I/B/E/S.

“It’s a continuation of what we’ve seen the past few quarters where the ag market is extremely strong,” said analyst Edlain Rodriguez of Gleacher & Company.

Relatively high prices for crops such as corn spurred demand for fertilizer as farmers looked to maximize profits, Rodriguez said.

Agrium’s shares, listed in New York and Toronto, should rise modestly on the better-than-expected performance, but gains will be limited by the company’s guidance for the first half that includes a slightly weaker second-quarter performance than analysts were expecting, Rodriguez said.

Agrium expects to post diluted earnings of $4.40 to $4.90 per share for the first half of 2011.

“Crop nutrient demand was strong in North America and globally, providing underlying support to crop nutrient prices,” the company, which reported a 91 percent rise in crop nutrient sales in the first quarter, said in a statement.

Excluding a pre-tax share-based payment expense and a pre-tax gain, its first-quarter profit was $1.03 a share.

Calgary, Alberta-based Agrium said sales rose 60 percent to $2.95 billion.

Last week, rival Potash Corp, the world’s largest fertilizer maker, reported a higher quarterly profit that also topped expectations, as soaring grain prices boosted demand and prices for crop nutrients. [ID: nN2820337]

In December, Agrium had 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 [CARG.UL].

Cargill has received clearance from Australia’s Foreign Investment Review Board for the acquisition, the companies said earlier on Wednesday. (Reporting by Rod Nickel in Winnipeg and Arnika Thakur in Bangalore, editing by Don Sebastian, Dave Zimmerman)

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