Calgary-Agrium Inc. President and CEO Mike Wilson told analysts last week that despite a 30 percent drop in the company’s stock price, the earnings potential for the company is up at least that much. He said based on current margins with fertilizer prices and costs, the company could earn $15-$17 per share annually. The company notes that it is not giving official guidance, but giving a hypothetical EPS relating to current market conditions. Agrium earned $3.25 per diluted share in 2007 and has no official forecast for 2008. Wilson said nitrogen, phosphate, and potash margins at today’s costs and prices are more than double what they were in the company’s second quarter, creating strong potential for its earnings. He added the company’s business is as strong as ever, as are farmer margins, and that the company has seen no signs of cutbacks from farmers. Wilson said the company wants to double its retail operations again after recent large acquisitions (Royster-Clark and United Agri Products) gave it a 15 percent share of the U.S. market. He said the company is now three times larger than its nearest competitor. “It’s going to be a little more difficult this time,” he said. “Rather than doing the big moves, you may see us doing a number of small moves.” Agrium expects to make a decision by the end of the year as to the location for a new greenfield potash mine. Four sites are under consideration. The company also plans to expand its existing potash mine capacity to 3 million mt/y, up from the current 2.05 million mt. Wilson was speaking before the Credit Suisse 2008 Chemical and Ag Science Conference.
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