UAP losses up in 3Q; guidance revised

UAP Holding Corp. reported a net loss of $13.1 million (.26 per diluted share) on sales of $375.7 million for the third quarter ending Nov. 26, 2006, versus a year-ago loss of $9.3 million ($.19 per share) on sales of $323.1 million. Nine-month results were also down, but in the plus column, with net income of $40.9 million ($.78 per share) on sales of $2.5 billion, versus the year-ago $63.3 million ($1.21 per share) and $2.4 billion, respectively.

UAP President, Chairman, and CEO Kenny Cordell told analysts Thursday that he was happy 2006 was over and was looking forward to better times in the New Year. Like everyone else, he is optimistic about the spring fertilizer season. He related a litany of woes in 2006, including bad weather and a fall fertilizer season that did not take off as predicted. Still, he said, the company managed to improve market share in all three major businesses – fertilizer, crop protection, and seed. He said that in fertilizer, volumes for UAP were only off slightly – less than one percent, whereas other fertilizer companies were reporting declines of 5-8 percent. Increased fertilizer sales of 2.9 percent in the third quarter and 1.8 percent year-to-date were attributable to higher prices. Cordell said the higher prices deterred buying. He also accused fertilizer competitors of dumping product.

UAP said that due to the challenging external environment and the financial performance in the past nine months, it is revising its fiscal 2007 full year guidance down to $1.15-$1.25 per diluted share, excluding charges related to refinancing of debt. This is down from $1.25-$1.40 given in October.