It has been about a month since the last earnings report for Agrium Inc. . Shares have lost about 6.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Agrium Lags Earnings, Sales Estimates in Q4
Agrium posted net profit (attributable to its equity holders) of $67 million or $0.49 per share in the fourth quarter of 2016, as against net earnings of $201 million or $1.45 million per share recorded a year ago. The lower net earnings were due to reduced year-over-year nutrient pricing.
Agrium’s adjusted earnings came in at $0.50 per share for the reported quarter, missing the Zacks Consensus Estimate of $0.65.
Revenues decreased 5.3% year over year to $2,280 million in the reported quarter. The top line also missed the Zacks Consensus Estimate of $2,359 million.
Segment Review
Revenues from the Retail segment increased 3.6% year over year to $1.8 billion in the quarter, while gross profit rose 4% to $623 million. The growth in sales was driven by higher crop protection product and seed sales. Rise in profit was backed by strong demand for crop protection products and application services in the U.S and Australia.
Sales from the Wholesale segment declined 26% year over year to $657 million, primarily due to lower global fertilizer prices across all nutrients compared to the year-ago quarter. Gross profit was $134 million in the reported quarter, declining significantly from $320 million in the year-ago quarter.
Financial Position
Agrium ended the fourth quarter with cash and cash equivalents of $412 million, down roughly 20% year over year. Long-term debt dropped around 2.5% to $4,398 million as of Dec 31, 2016. Cash provided by operating activities increased around 33.8% year over year to $1,462 million in the quarter.
Outlook
Agrium provided its earnings guidance for 2017 in the range of $4.50-$6.00 per share. The guidance assumes some recovery from the prevailing nitrogen prices during the major application seasons. Agrium expects Retail EBITDA to be in the range of $1.125 billion to $1.225 billion, and Retail nutrient sales volumes to range between 10.2 million to 10.6 million tons in 2017. The company anticipates nitrogen production to total 3.6 to 3.8 million tons. Agrium's expects potash production of between 2.4 and 2.8 million tons in 2017.
Total capital expenditures are expected to be in the range of $650 million to $750 million, of which around $500 million to $550 million is anticipated to be sustaining capital expenditures. Agrium's effective tax rate for 2017 is expected to range between 27% and 29%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend for fresh estimates. There has been one upward revision for the current quarter.
VGM Scores
At this time, Agrium's stock has a great Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Agrium (AGU) Down 6.3% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Agrium Inc. . Shares have lost about 6.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Agrium Lags Earnings, Sales Estimates in Q4
Agrium posted net profit (attributable to its equity holders) of $67 million or $0.49 per share in the fourth quarter of 2016, as against net earnings of $201 million or $1.45 million per share recorded a year ago. The lower net earnings were due to reduced year-over-year nutrient pricing.
Agrium’s adjusted earnings came in at $0.50 per share for the reported quarter, missing the Zacks Consensus Estimate of $0.65.
Revenues decreased 5.3% year over year to $2,280 million in the reported quarter. The top line also missed the Zacks Consensus Estimate of $2,359 million.
Segment Review
Revenues from the Retail segment increased 3.6% year over year to $1.8 billion in the quarter, while gross profit rose 4% to $623 million. The growth in sales was driven by higher crop protection product and seed sales. Rise in profit was backed by strong demand for crop protection products and application services in the U.S and Australia.
Sales from the Wholesale segment declined 26% year over year to $657 million, primarily due to lower global fertilizer prices across all nutrients compared to the year-ago quarter. Gross profit was $134 million in the reported quarter, declining significantly from $320 million in the year-ago quarter.
Financial Position
Agrium ended the fourth quarter with cash and cash equivalents of $412 million, down roughly 20% year over year. Long-term debt dropped around 2.5% to $4,398 million as of Dec 31, 2016. Cash provided by operating activities increased around 33.8% year over year to $1,462 million in the quarter.
Outlook
Agrium provided its earnings guidance for 2017 in the range of $4.50-$6.00 per share. The guidance assumes some recovery from the prevailing nitrogen prices during the major application seasons. Agrium expects Retail EBITDA to be in the range of $1.125 billion to $1.225 billion, and Retail nutrient sales volumes to range between 10.2 million to 10.6 million tons in 2017. The company anticipates nitrogen production to total 3.6 to 3.8 million tons. Agrium's expects potash production of between 2.4 and 2.8 million tons in 2017.
Total capital expenditures are expected to be in the range of $650 million to $750 million, of which around $500 million to $550 million is anticipated to be sustaining capital expenditures. Agrium's effective tax rate for 2017 is expected to range between 27% and 29%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend for fresh estimates. There has been one upward revision for the current quarter.
Agrium Inc. Price and Consensus
Agrium Inc. Price and Consensus | Agrium Inc. Quote
VGM Scores
At this time, Agrium's stock has a great Growth Score of 'B', however its Momentum is doing a bit better with an 'A'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.