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Bloomberg
Agrium Inc., the largest agricultural retailer to US farmers, fell after the company cut its full-year profit forecast for a second time this year amid an agriculture slump that has dragged down prices for crop nutrients.
Earnings in 2016 will be $5 to $5.30 a share, the Calgary-based company said in a statement. That compared with a May forecast of $5.25 to $6.25 a share. The stock fell 0.9 percent to close at C$116.52 in Toronto, after slumping as much as 2.7 percent, the biggest intraday loss since June 27.
Over the past year, prices have fallen for the potash, phosphate and nitrogen fertilizer Agrium produces as cheaper commodities have reduced the appetite for agricultural chemicals. Three straight annual declines for corn, soybean and wheat futures have cut farmer spending. The company also lowered its full-year guidance when it reported first-quarter profit in May.
Depressed crop and fertilizer prices are “going to be a weight that sticks with them for a while here,†Steve Hansen, a Vancouver-based analyst with Raymond James, said in a telephone interview.
ACQUISITION OPPORTUNITIES
Still, the company posted better-than-expected earnings in the second quarter amid strong margins and lower costs. Profit excluding one-time items was $4.18 a share, beating the $4.12 average of 20 analysts’ estimates compiled by Bloomberg.
Even as fertilizer prices have
been under pressure, there are signs a rebound could be coming amid
expectations for high U.S. crop yields, Chief Executive Officer Chuck Magro said Thursday on an earnings call. Higher yields strip significant nutrients from the soil.