Shares of leading fertilizer company
) shot up as it raised its earnings forecast for fourth-quarter
2012, citing a strong fall application season in North America
and continued strength in grain and oilseed pricing. An extended
fall season in the U.S. boosted the demand for its nutrients in
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The Canada-based company said that it now expects earnings
(excluding one-time items) for the fourth quarter to be a tad
higher than $2.00 per share. Earlier, it expected earnings of
$1.50 to $1.90 per share. The current Zacks Consensus Estimate
for the quarter is $1.69 per share.
The company envisions its Retail business unit to bring in more
than $120 million of EBITDA (earnings before interest, taxes,
depreciation, and amortization) in the fourth quarter. Its
Wholesale segment is expected to generate EBITDA in excess of
Agrium's shares rose as high as $4.20 (or roughly 3.8%) following
the announcement yesterday.
The company expects high crop prices and tight grain inventories
to continue to create higher demand for its nutrients. It
envisions strong demand for top quality seeds in the 2013 growing
Agrium stands to gain from rising crop prices and overall strong
fundamentals for the agriculture and crop input market. The
company follows a strategy to grow along the value chain through
a combination of acquisitions and organic development.
The acquisition of AWB has expanded Agrium's Retail division and
provided access to the growing Southeast Asia market. Moreover,
the acquisition of Viterra's agri-products business is expected
to support its earnings in 2013.
However, weak overseas potash demand stemming from the
uncertainty associated with new supply contracts with China and
India is impacting pricing for the nutrient and may affect
overseas shipment volumes in the fourth quarter.
Agrium, which is among the prominent fertilizer companies along
), will report its fourth quarter and full-year 2012 results on
Agrium currently retains a short-term (1 to 3 months) Zacks Rank