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How Agrium’s 4Q15 Earnings Beat Analysts’ Estimates by 10%

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Agrium’s earnings

Agrium (AGU), one of the major agricultural fertilizer retailers, reported 4Q15 EPS (earnings per share) of $1.52. This beat analysts’ estimates of $1.38, resulting in a 10% positive surprise. Its share price at the end of the trading day on February 9, 2016, was $83.69, down slightly from the previous day’s close of $84.01.

Year-to-date, Agrium is down 6.3% while the broader portfolio of the Materials Select Sector SPDR ETF (XLB) is down 8.9% year-to-date (or YTD).

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EPS grew

Year-over-year earnings per share increased 204% from $0.50 per share in 4Q14 amid weakness in global currencies and the environment for commodity prices. These negative conditions also affect other agricultural fertilizers, including the Mosaic Company (MOS), which is down 13.5% YTD; Intrepid Potash (IPI), which is down 31% YTD; and Potash Corporation (POT), which is down 7.5% YTD. Israel Chemicals (ICL), on the other hand, is up 1% YTD.

Series overview

In this series, we will look at some of the key metrics for Agrium, as well as what buoyed its EPS during the quarter. We will also see notes from the analysts’ Q&A, which will give us a peek into issues and concerns that were not fully addressed by the management during the earnings call.

Plus. we will look at the market updates for the coming quarters. We will wrap up this series with the valuation multiples and price target for Agrium. In the next part of this series, let’s look at the company’s revenues.

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