uploads///Stock Price and Earnings

Why Did Agrium Perform Better Than Expected in 1Q16?


May. 6 2016, Published 9:13 a.m. ET

Agrium’s earnings

Agrium (AGU), one of the major agricultural fertilizer retailers, reported its 1Q16 adjusted EPS (earnings per share) of $0.02 per share on May 3, 2016. That beat analysts’ estimate of -$0.05 per share. Its share price at the end of the trading day on May 3, 2016, was $84.30, down slightly from the previous day’s close of $86.

Year-to-date, Agrium has fallen 6.6%. The broader portfolio of the PowerShares International Dividend Achievers ETF (PID) has risen 4.5%, and the S&P 500 benchmark index is flat year-to-date (or YTD).

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Year-over-year EPS declined 83%, from $0.12 per share in 1Q15 amid the weakness in global currencies and a weak environment for commodity prices. These negative conditions also affect other agricultural fertilizer companies. Following are the EPS results YTD for some of these companies:

  • Mosaic (MOS): fell 3.0%
  • Intrepid Potash (IPI): fell 63%
  • PotashCorp (POT): fell 3.3%
  • Israel Chemicals (ICL): rose 10.3%

Series overview

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

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


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