TORONTO (miningweekly.com) – Agricultural products producer Agrium Inc has reported positive headline earnings for the three months ended December 31, beating market expectations convincingly. However, its earnings forecast for the full-year 2016 came in below expectations and weighed on its share price performance on Tuesday.

The Calgary, Alberta-based producer of nitrogen, potash and phosphate fertilisers reported adjusted net earnings of $209-million, or $1.52 a share, beating Wall Street analyst expectations of $1.38 a share. For the full year, Agrium reported adjusted earnings of $1.02-billion, or $7.25 a share, compared with analyst expectations of $7.01 a share.

Agrium reported that, for the fourth quarter, net profit nearly tripled to $200-million, or $1.45 a share, driven by a strong performance from the wholesale business unit, which achieved reduced costs of production and higher overall sales volumes for all three nutrients. The retail segment’s earnings were also higher than the previous comparable quarter, despite the wet weather in the US during the fall application season.

"Agrium achieved a strong finish to 2015, despite lower nutrient prices and challenging commodity markets. A key differentiator for the company was our integrated strategy, which helped provide stability in our earnings.

"We also benefited from the proactive steps we took to further strengthen the company over the past year, including a renewed focus on execution and controlling our controllables. These benefits flowed through to our bottom line, helped us to generate $8.59 of free cash flow per share and drive increased returns to shareholders, while still investing in future earnings growth," commented Agrium president and CEO Chuck Magro.

On a consolidated basis, sales during the final quarter of 2015 fell 11% to $2.4-billion, missing analyst forecasts of $2.85-billion.

Agrium announced that it expected full-year 2016 earnings per share to total between $5.50 and $7, which was below analyst expectations for the company to earn $7.01 a share.

Agrium’s TSX-listed stock fell to a one-year low of C$110.89 apiece on Tuesday, down 5.25% from Monday’s close.

Prices for the crop nutrient potash have been in decline as the market faces downward pressure from fewer sales in China, which had introduced a new value-added tax on fertiliser sales, while drier weather in India and lower demand caused by weaker currencies and adverse weather conditions had affected the rest of Asia.

Despite the weak macroeconomic environment, Agrium expected growers within North America and other major agricultural markets to plant historically high crop acreage again in 2016, supporting robust crop input demand. In the US, growers were expected to increase overall crop acreage, including a one-million- to three-million-acre increase in corn area, as significant crop acreage was lost in 2015, owing to excess moisture in parts of the US Corn Belt.

In January, rival miner Potash Corp of Saskatchewan also announced lower-than-expected profit for 2016 of between $0.90 and $1.20 a share, slashing its dividend by 34% as a result of the challenging market conditions and emerging market currency weakness relative to the US dollar, which continues to weigh on the fertiliser market.