Agrium Reveals First Half '12 Outlook

Agrium Inc. (AGU - Analyst Report) announced its earnings outlook for the first half of 2012. The company expects its earnings for the period to be near or at the top end of its prior guidance range of $5.50 to $6.10 per share, as it benefits from strong global grain prices and tight demand-supply situation of nutrients in the international market.

The company expects second-quarter earnings from continuing operations to be near or at the top end of its previously released guidance range of $4.18 to $4.78 per share. The outlook does not include hedging gains or losses and share-based payments expenses.

The second-quarter 2012 guidance assumes higher nitrogen and potash prices, but lower phosphate prices compared to the same period last year. It has also taken lower wholesale fertilizer sales volumes and lower margins in North America into account.

Last week, Agrium more than doubled its dividend payment to 50 cents per share from 22.5 cents per share, reflecting its confidence in the future outlook. The company remains optimistic of attaining its future objectives as well as providing increased return to shareholders.

Last month, the company released its first-quarter 2012 results. The company’s earnings (excluding one-time items other than stock-based compensation expenses) of $1.03 per share exceeded the Zacks Consensus Estimate of $1.00 during the quarter. The reported earnings came in at 97 cents per share, down 11% from $1.09 in the year-ago quarter.

Revenues amounted to $3,629 million, up 23% from $2,954 million a year ago and surpassed the Zacks Consensus Estimate of $2,966 million. Retail business contributed to strong sales in the quarter as the onset of early spring season in North America proved advantageous for it.

The company competes with CF Industries Holdings Inc. (CF - Analyst Report) and Potash Corp. of Saskatchewan Inc. (POT - Analyst Report). It maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.