Agrium Inc. has announced that it expects its fourth quarter 2013 earnings from continuing operations to be at the bottom of the previously released guidance range of $0.80-$1.25 per diluted share. The update to guidance is primarily due to lower than expected sales prices across all Wholesale nutrients in the quarter and lower than expected UAN and domestic potash sales volumes, partly due to challenges with domestic rail shipments. Agrium’s Retail operations are expected to achieve record results for the fourth quarter and for the 2013 year. Retail was able to offset industry headwinds of lower nutrient prices and a compressed fall season in the U.S. by achieving higher margins for nutrients, seed and services and other product lines.
Corporate inter-segment eliminations, largely related to Wholesale nutrient volumes that have been purchased by Retail but have not yet been sold to end customers, were higher than anticipated. These eliminations postpone the recognition of these sales and impacted earnings by approximately $18-million in the fourth quarter of 2013. Earnings from these sales will be recognized once Retail completes the sale to end-customers this spring.
Agrium also expects to report a number of one-time adjustments in the fourth quarter of 2013 that are excluded from the fourth quarter guidance. This includes a purchase gain of approximately $250-million related to the acquisition of the Viterra Agri-business on Oct. 1, 2013. Pertaining to the AWB Ltd. / Landmark acquisition, it will reflect the receipt of approximately $70-million for an insurance recovery relating to a long-standing litigation case on soybean shipments and a goodwill impairment of approximately $220-million in Landmark due to lower than expected business performance and delays in synergy realization.