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Agrium cuts top end of FY'17 earnings guidance range as Q2 income slides

Agrium Inc. cut the upper end of its earnings guidance for the full year to a range of US$4.75 per share to US$5.25 per share, from US$4.75 per share to US$5.75 per share previously, as second-quarter net earnings attributable to shareholders slightly dipped year over year.

The company said Aug. 9 that it cut the guidance range due to a weak nitrogen pricing environment and challenging weather conditions during spring, which impacted North American Retail crop nutrient margins and sales volumes.

Agrium posted net earnings attributable to shareholders of US$557 million, or US$4.03 per share, in the three-month period, compared to US$564 million, or US$4.08 per share, a year ago.

Sales declined to US$6.32 billion in the quarter, from US$6.42 billion in the prior-year quarter. Gross profit, meanwhile, remained stable on a yearly basis at US$1.53 billion in the three months.

For the full year, the company now expects EBITDA from its retail segment of between US$1.15 billion and US$1.20 billion, compared to the previous guidance of US$1.13 billion to US$1.25 billion.

On the production side, nitrogen output is expected to range from 3.5 million to 3.6 million tonnes, and potash output is expected to range from 2.5 million to 2.7 million tonnes.

Total capital expenditures are expected to be between US$650 million and US$700 million, including about US$450 million to US$500 million of sustaining capital expenditures.

Agrium's net earnings attributable to shareholders in the second half totaled US$546 million, or US$3.95 per share, down from year-ago net earnings attributable to shareholders of US$566 million, or US$4.09 per share.

Sales in the six-month period also slipped marginally to US$9.04 billion, from US$9.14 billion in the prior-year half.

The company also noted that it expects the merger with Potash Corp. of Saskatchewan Inc. to complete by the end of the third quarter.