Fertilizer maker Agrium announced Wednesday in Calgary that it tallied a US$636 million profit — or US$4 a share in the second quarter.
This is the company’s strongest quarterly performance ever and more than doubles the previous high of US$229 million or US$1.70 a share a year ago.
The profit vastly exceeded market analysts expectations, which averaged US$2.96 a share, according to a survey by the financial wire service Bloomberg. Agrium estimated that the acquisition of UAP earlier this year for US$2.1 billion, contributed 70 cents a share to the bottom line this quarter. UAP, based in Greeley, Colorado, is the largest retailer of fertilizer, chemicals and seeds to the U.S. agriculture sector.
Despite this good news Agrium and its competitors in the fertilizer sector such as the Potash Corporation of Saskatchewan have seen their share prices drop in recent weeks as commodity prices have taken a beating and left investors pondering whether the fertilizer boom has peaked.
Agrium shares fell to CDN$82.78 on the TSE prior to the announcement, down $33.37 (or 29 per cent) from their mid-June high of $116.15. Potash Corp shared were $180.50, down $65.79 from their mid-June high of $246.29.
Both stocks made up some lost ground Wednesday, with Agrium shares up $3.33 at the opening bell and Potash Corp up $4.14.