Canadian fertilizer company Agrium Inc. (AGU, AGU.TO) on Thursday reported a 9 percent decline in profit for the first quarter on lower sales, reflecting cold, wet weather that delayed plantings by farmers in the U.S. The company also said its board has authorized the repurchase of up to 5 percent of its outstanding common shares.
Retail sales for the quarter decreased 13 percent to $2.14 billion, largely due to colder weather and a more typical spring season compared to a historically early spring season in the same period last year.
Wholesale sales decreased 2 percent to $1.13 billion, reflecting weaker international phosphate prices coupled with lower product purchased for resale sales prices and volumes.
Advanced Technologies sales for the quarter were almost flat with the year-ago period at $133 million.
Agrium's first-quarter net earnings were $141 million or $0.94 per share, compared to $155 million or $0.97 per share in the year-ago period. The latest quarter's results included share-based payments expense of $16 million or $0.09 per share.
Excluding this item, net earnings for the quarter were $153 million or $1.03 per share. On average, analysts polled by Thomson Reuters expected the company to earn $1.08 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter declined 10 percent to $3.22 billion from $3.57 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $3.47 billion.
Looking ahead to the second quarter, Agrium forecast earnings of $4.60 to $5.40 per share, excluding derivative gains or losses and share-based payments expense. Analysts expect the company to report earnings of $5.33 per share for the quarter.
Mike Wilson, President and CEO of Agrium said, "The continuation of cold, wet weather in April is likely to result in a somewhat compressed spring application season this year. However, we still expect excellent demand for crop inputs in the first half of 2013 given positive grower sentiment and the strength in the agricultural fundamentals."
Agrium's board of directors has authorized the repurchase of up to 5 percent of its currently issued and outstanding common shares through a normal course issuer bid, subject to regulatory approvals, including approval from the Toronto Stock Exchange.
The company expects the bid to commence in May 2013. The shares purchased under the bid will be cancelled. Agrium presently has a total of about 149 million shares outstanding.
In Thursday's regular session, AGU is trading at $93.73, down $0.51 or 0.54 percent on a volume of 652,707 shares.
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