* EPS C$0.03 versus analysts' forecast C$0.06
* Net income C$10.7 mln versus year-earlier C$33 mln loss
* Acquires U.S. pasta company
* Shares rise 2.5 pct in Toronto (Adds comments on acquisition, outlook)
By Rod Nickel
WINNIPEG, Manitoba, March 10 (Reuters) - Viterra Inc VT.TO VTA.AX said on Wednesday it returned to profit in its first quarter thanks to solid fertilizer demand and a contribution from its recently acquired Australian operations.
Shares of the Canadian grain handler, which completed its takeover of Australia's ABB Grain in September, rose 2.5 percent, even though its earnings fell short of expectations, as the results eased some of the uncertainty surrounding the deal.
"There's no major surprises in my view," said Robert Winslow, an analyst at Wellington West Capital Markets.
Viterra's Profit for the three months ended Jan. 31 came in at C$10.7 million ($10.4 million), or 3 Canadian cents a share, compared with a loss of C$33 million, or 14 Canadian cents a share, a year earlier. Revenue rose 29 percent to C$1.8 billion.
Analysts, on average, had expected earnings of 6 Canadian cents a share on revenue of C$1.9 billion, according to Thomson Reuters I/B/E/S.
The quarter was the first to fully reflect the acquisition of ABB Grain. The deal put Regina, Saskatchewan-based Viterra among the world's top grain handlers with supply sources in both the Northern and Southern Hemispheres.
Demand by North American farmers for fertilizer was sluggish during much of last year due to high prices, but volumes there rose 15 percent in the latest quarter.
Viterra's agri-products segment generated revenues of C$215.3 million, up 13 percent.
North American grain shipments for the quarter were 3.6 million tonnes, down 5 percent from the year-earlier quarter.
Viterra received 6.2 million tonnes of grain in South Australia for storage, but the company said farmers were reluctant to sell during harvest due to low commodity prices.
The company also said on Wednesday it planned to acquire Dakota Growers Pasta Co, based in Carrington, North Dakota. It did not provide an acquisition price, but it said that Dakota Growers has an enterprise value of US$240 million.
Dakota Growers is one of largest durum mills in North America and the third-largest producer of dry pasta, Viterra said. It expects the transaction to close in the second quarter of this year.
"It's right in our wheelhouse," Chief Executive Mayo Schmidt said in a conference call, adding that Viterra is one of the biggest durum handlers in North America. He said the acquisition will "more than modestly" add to earnings.
The outlook for the year is positive in light of the Canadian Wheat Board's target of achieving the largest grain exports in 10 years. The board has a monopoly on marketing Western Canadian malting barley and wheat.
Viterra's prospects also look strong because South Australia's current harvest estimate is well ahead of last year's production in the state, the company said.
In Canada, Viterra expects farmers to plant 16.5 million acres of canola this spring, an increase from last year. That bodes well for the company because canola is a big consumer of crop inputs such as seed and fertilizer, said Doug Wonnacott, senior vice-president of agri-products.
Canadian canola shipments with the common blackleg disease have faced import restrictions from China since November. Viterra has continued shipping to China under its new rules, but volume has dropped off, said Chief Operating Officer Fran Malecha.
Viterra shares were up 2.5 percent at C$9.89 on the Toronto Stock Exchange on Wednesday afternoon.