August 6, 2008 / 11:16 AM / 10 years ago

Agrium boosts profits as fertilizer prices surge

TORONTO (Reuters) - Agrium Inc AGU.TO profits more than doubled in the second quarter as surging grain markets pushed up demand and prices for the fertilizers it sells to farmers and wholesale markets.

Agrium, the world’s third-largest nitrogen producer and the top U.S. retailer of crop supplies, earned $636 million or $4 a share in the quarter, up from $229 million or $1.70 a share a year ago.

The Calgary, Alberta-based company said the results included hedging gains of $161 million, or 68 cents a share, and a stock-based compensation expense of $115 million, or 49 cents a share.

Excluding the one-time items, earnings would have been $3.81 a share, Agrium said.

Analysts had expected earnings of $3.23 per share, on average, according to Reuters Estimates.

The company had forecast earnings of $2.80 to $3 a share in June, but it said the estimate did not include returns from the UAP chain of retail stores it acquired earlier this year.

Agrium said the UAP acquisition is estimated to have contributed around 70 cents to its diluted earnings per share for the May 5 to June 30, 2008 period.

Agrium said sales rose to $3.87 billion from $2.03 billion as it sold more fertilizer, chemicals and seed at higher prices than a year earlier.

The company said it anticipates more strong demand for its products and services in the second half, spurred by corn, wheat and soybean prices at two to three times historic levels.

“This should support crop input demand and continued strength in the nutrient markets benefiting our retail, wholesale and advanced Technologies businesses,” Mike Wilson, Agrium’s chief executive, said.

Agrium said it intends to provide forecasts for the second half of the year with its third quarter earnings.

($1=$1.04 Canadian)

Reporting by John McCrank; editing by Janet Guttsman

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