Agrium beats by $0.14, misses on revs; guides FY16 EPS below consensus
- Reports Q4 (Dec) earnings of $1.52 per share, $0.14 better thanthe Capital IQ Consensus of $1.38; revenues fell 11.0% year/year to $2.41 bln vs the $2.84 bln Capital IQ Consensus.
- The increased net earnings were driven by strong performance from our Wholesale business unit, which achieved reduced cost of production and higher overall sales volumes for all three nutrients.
- Retail's fourth quarter earnings were also higher than last year, despite the wet weather in the U.S. during the fall application season.
- Co issues downside guidance for FY16, sees EPS of $5.50-7.00 vs. $7.04 Capital IQ Consensus Estimate.
- Expects Retail EBITDA to be $1.075-billion to $1.175-billion, and Retail nutrient sales volumes to be 9.8 to 10.2 million tonnes in 2016.
- The Canpotex proving run for the Vanscoy expansion was highly successful. We demonstrated our nameplate capacity within a year of mechanical completion, which increased AGU's allocation to 10.3% of total Canpotex shipments starting in 2016.
- "We expect macroeconomic challenges in combination with current crop prices to be a risk in 2016. However, the arrival of the Northern Hemisphere's spring application season over the next couple of months is expected to result in improved demand, particularly in light of the poor fall season in the U.S. and the fact declining crop nutrient prices have caused buyers around the world to sit back and wait for stability. We also expect there will be a supply response across all three major nutrients in reaction to current price levels - some of which we have seen already in the form of production cuts and closures."