Agrium’s Earnings Beat Analyst Estimates: What You Need to Know

Agrium (AGU), one of the major agricultural fertilizer retailers, reported 2Q16 adjusted EPS (earnings per share) of $4.18 per share on August 3, 2016, beating the analyst estimate of $4.12 per share. Its share price closed slightly down by ~1% at $89.4 the end of the trading day on August 4, 2016, after the earnings call.

YTD (year-to-date), Agrium has returned 0.5%, as compared to the broader portfolio of the Materials Select Sector SPDR ETF (XLB), which has risen by 13.7%, and the S&P 500 benchmark index, which has risen by 7.5% YTD.

The company’s YoY (year-over-year) EPS declined by 11% from $4.7 per share in 2Q15 amid weakness in the global agricultural environment and weak commodity prices for corn, wheat, and soybean. (Read our monthly series July Update: Is More Weakening Expected in Agricultural Fertilizers? to track crop prices.)

These negative conditions also affect other agricultural fertilizer companies. Below are the adjusted YTD EPS results for four fertilizer peers:

• Mosaic (MOS) has fallen by 70.6%.
• Intrepid Potash (IPI) has fallen by 121.8%.
• PotashCorp (POT) has fallen by 67.2%.
• CF Industries (CF) has fallen by 91.1%.

In this series, we’ll look at some of the key metrics for Agrium and what buoyed its EPS in 2Q16. We’ll analyze notes from the earnings call to understand the central issues and concerns addressed by management during the call. We’ll also look at market updates for coming quarters.

Let’s begin with Agrium’s 2Q16 sales.