Agrium Inc. reported net earnings of $57 million ($.37 diluted earnings per share) for the third quarter ending Sept. 30, 2010, compared with the year-ago $26 million ($.16 per share). The 2010 third-quarter results included a pre-tax expense of $85 million ($.39 per share) on stock-based compensation, and pre-tax gains of $10 million ($.05 per share) on natural gas and other hedge positions. Excluding these items, net earnings would have been $111 million ($.70 per share).
Third-quarter sales were $2.06 billion, up from the year-ago sales of $1.89 billion.
“We believe the outlook for Agrium’s products and businesses are as good as they have ever been, supported by excellent fundamentals for the agricultural and crop input markets,” said Mike Wilson, Agrium president and CEO. “While EBITDA from our retail operations this quarter was almost double last year’s level and wholesale’s rose by more than 60 percent, we expect the improvements in the crop input markets to become even more evident in the fourth quarter of 2010. Furthermore, we anticipate the strength in crop input demand and prices to continue into the spring of 2011, benefiting all three of our strategic business units.”
Agrium is providing guidance for the fourth quarter of 2010 of $1.00-$1.30 diluted earnings per share, excluding estimated hedging gains or losses and stock-based compensation expense in the fourth quarter.
Third-quarter retail net earnings (EBIT) were $75 million on sales of $1.24 billion, up from the year-ago $31 million on sales of $1.23 billion.
Third-quarter wholesale net earnings were $135 million on sales of $799 million, up from the year-ago $83 million and $658 million. Potash saw the biggest change from year-ago levels with sales volumes of 388,000 mt (205,000 mt domestic, 183,000 international) moving at an average price of $327/mt ($379/mt domestic, $270/mt international), compared to the year-ago 273,000 mt (135,000 mt domestic, 138,000 mt international) and $399/mt ($488/mt domestic, $312/mt international).
For the third quarter, advanced technology had a $4 million loss on sales of $92 million, compared to zero earnings on $60 million in sales for the year-ago quarter.
Nine-month earnings were $556 million ($3.53 per share) on sales of $8.3 billion, up from the year-ago $336 million ($2.13 per share) and sales of $7.8 billion.
Nine-month retail income was $363 million on sales of $5.64 billion, up from the year-ago $220 million on sales of $5.4 billion.
Nine-month wholesale income was $560 million on sales of $2.63 billion, up from the year-ago $355 million and $2.3 billion. Potash saw the biggest change from year-ago levels, with volumes of 1.45 million mt (883,000 mt domestic, 568,000 mt international) moving at an average price of $342/mt ($390/mt domestic, $267/mt international) compared to the year-ago 410,000 mt (188,000 mt domestic, 222,000 international) and $483/mt ($558/mt domestic, $418/mt international).
Nine-month advanced technology income was $10 million on sales of $293 million, up from the year-ago $9 million and $209 million, respectively.
Miles Farm Supply deal to close soon
Agrium confirmed that it recently completed an asset purchase agreement with Miles Farm Supply, Owensboro, Kentucky (GM Oct. 25, p. 1), and said the deal is expected to close shortly. The deal will add some 19 outlets, mainly in Kentucky, with $165 million in annual revenue. Agrium told analysts that Miles’ wholesale business would bring the Miles revenues up to $235 million.
In total, Agrium said it has added some 88 retail outlets this year, with that figure including Miles and some 24 picked up in Argentina earlier this year (GM June 21, p. 1), as well as an additional 45 independent retail locations across the U.S. and Canada added this year. The combined annualized retail net sales in 2010 from these new retail branches is approximately $440 million.
In other acquisition news, Agrium expects its purchase of AWB Ltd. in Australia (GM Aug. 23, p. 1) to conclude in early December.