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Agrium boosts earnings forecast on strong fertilizer sales

Michael Wilson, president and chief executive officer of Agrium, addresses shareholders in this file photo.

Todd Korol/REUTERS

Agrium Inc. is raising its fourth-quarter earnings estimate based on robust grain and oilseed prices that are helping boost demand for its fertilizers and other products.

Calgary-based Agrium says it expects fourth-quarter earnings to be slightly above $2 per diluted share, compared with its previous guidance of $1.50 to $1.90.

The upwardly revised guidance comes as New York activist hedge fund Jana Partners LLC pushes for major changes at the company.

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Jana -- Agrium's largest shareholder with a 6-per-cent stake -- is seeking support from other major Canadian shareholders in it's effort to get Agrium to slash costs, provide more transparency on its retail business and do a better job of allocating capital.

Jana has also proposed splitting Agrium into two separate companies -- a fertilizer producer and a retailer of its products in farm communities.

Agrium says it stands by the continued integration of the wholesale fertilzer and retail businesses. It's expected to provide greater detail on its retail operations on the company's analyst day in New York next Monday.

"The increase in our estimated financial results is due to a very strong finish to the fall application season in our North American retail operations, supported by an extended fall season in the U.S. and continued strength in grain and oilseed prices," Agrium president and chief executive officer Mike Wilson said in a news release Thursday.

"Going forward, continued strength in crop prices and low global grain inventories are anticipated to support a strong spring application season in 2013."

Agrium's finalized fourth-quarter and annual results are scheduled to be unveiled on Feb. 22.

The company said it expects its retail business unit to produce more than $120-million in earnings from operations before finance costs, income taxes, depreciation and amortization (EBITDA), which would make for a record year of about $950-million in EBITDA.

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Wholesale operations are also providing better-than-expected results with anticipated EBITDA for the fourth quarter and the year of $500-million and $1.9-billion, respectively.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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