Agrium's Fertilizer Hit Paydirt

Agrium served up satisfying first-quarter results Friday as farmers stockpiled fertilizers in hopes of producing enough crops to satiate the world's growing demand for food and biofuel.

The agricultural nutrient producer said its retail, wholesale and advance technologies businesses all turned a profit in the first quarter, shored up by strong fundamentals within the agricultural sector.

The fertilizer industry has been on a high as major companies across the sector have reported first-quarter profits that more than doubled--and occasionally nearly tripled--in the past year. Farmers, eager to boost crop yields in order to feed growing global demand for crops, are relying on nutrients to turn impressive harvests (See: Bountiful Times For Fertilizer Sector).

Shares across the sector traded broadly higher on Friday. Potash (nyse: POT - news - people ) shares added $3.45, or 1.9%, closing at $186.61, Mosaic (nyse: MOS - news - people )'s stock gained $2.08, or 1.7%, at $124.63 and Agrium (nyse: AGU - news - people ) shares surged by $4.26, or 5.4%, to close the New York-based trading session at $82.61.

And the best is yet to come, according to Agrium.

"We expect our earnings this spring to surpass all previous records, even without the contribution of the UAP retail operations," said President Mike Wilson, referring to the company's acquisition of UAP Holding Corp. (nasdaq: UAPH - news - people ), an agricultural inputs distribution company. The transaction is expected to close tomorrow.

The company guided for second-quarter earnings between $1.92 and $2.22 a share, which includes a 19 cents a share one-time expense and excludes UAP-related gains or losses.

In the first quarter, higher realized nutrient prices helped push Agrium to a profit of $195.0 million, or $1.23 a share, from a loss of $11.0 million, or 8 cents a share in 2007's first-quarter. Sales rose 34.8% to $1.2 billion from $861.0 million in the previous year. Analysts forecasted earnings of 55 cents a share and sales of $1.0 billion.

On Apr. 10, the Calgary-based company agreed to acquire a 70.0% interest in Common Market Fertilizers, one of Western Europe's largest fertilizer distribution companies.

Agrium also opened an office in China last April, from which it plans to pursue local growth opportunities. Emerging markets are expected to account for the bulk of growing fertilizer demand (See: Mosaic's Fertile Future).