Agrium Earnings Bode Well for CF Industries' Report Next Week
Chris Damas submits:
Agrium (AGU) knocked the cover off the ball yesterday with the release of home run Q4 earnings and cash flow. The stock is up $2.66 near the close at $96.09 on the NYSE and reached $98.03 intraday, a new two and a half year high on 7 million combined NYSE and TMX volume. Wow. The company generated $335 million US in cash flow before working capital changes (CFBWCC) or $2.12 per share, on $2.4 billion in revenues. For all of 2010, cash flow was a humongous $1.22 billion or $7.75 per share on $10.74 billion in revenues. Q4 EPS continuing operations was $1.10 and on the low side of the $1.10 - $1.30 range given at the Q3 release date. I prefer to look at cash flow, as Agrium's earnings were impacted by writeoffs associated with the recent purchase of AWB (one months results included in Q4). To see how much Agrium has grown, consider Q4 2006, when the company reported only $33 million cash flow on $944 million. What was the reason for the great performance? In a word: Nitrogen. Early fall application of Nitrogen fertilizers due to great weather and strengthening corn and wheat prices drove Agrium’s total gross profit to $160 million versus $80 million in Q3. On the financial analyst conference call yesterday, Agrium CEO Mike Wilson said that nitrogen produced over half of wholesale profits and that domestic urea margins (the most common solid nitrogen fertilizer) had approached $200/mt. Potash and phosphate gross profits wereComplete Story »
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