Agrium reports $195 M in 1Q net income; company proceeds with UAP acquisition

Agrium Inc. on May 2 reported record first-quarter net earnings of $195 million ($1.23 diluted earnings per share) in 2008, versus a year-ago net loss of $11 million ($0.08 loss per share). First-quarter net sales were $1.1 billion, up from the year-ago $821 million.

“Our impressive first quarter results are due to the excellent fundamentals for the fertilizer and broader agriculture sector, as well as to the quality of our assets that span the agriculture value chain,” said Agrium President and CEO Mike Wilson. “Our Retail, Wholesale and Advanced Technologies business units all delivered record first quarter earnings this year. We expect our earnings this spring to surpass all previous records, even without the contribution of the UAP retail operations.”

Agrium is providing guidance for the first half of 2008 of a record $3.15 to $3.45 diluted earnings per share, or $1.92 to $2.22 diluted earnings per share for the second quarter. This includes an estimated $44 million ($0.19 diluted earnings per share) in stock-based compensation expense, and excludes any contribution from the UAP acquisition or potential hedging gains or losses.

Agrium obtained regulatory clearance on its UAP transaction May 1 and will accept for payment all shares of UAP common stock tendered to the offer immediately after its expiration at midnight May 2.

Potash sales volumes were 449,000 mt during the quarter with an average price of $292/mt, versus the year-ago 333,000 mt and $156/mt, respectively. Phosphate volumes were also up, at 232,000 mt ($612/mt) versus the year-ago 197,000 mt ($376/mt).

While total nitrogen volumes were down to 768,000 mt from 792,000 mt, average prices were up at $426/mt from $294/mt. Within this sector, ammonia volumes were up at 162,000 mt ($459/mt) versus the year-ago 148,000 mt ($333/mt). Urea volumes were down at 325,000 ($458/mt) compared to the year-ago 341,000 mt ($310/mt).

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