Agricultural product producer Agrium knows it is a good time to be in the fertilizer business.
Shares of Agrium (nyse: AGU - news - people ) soared to record heights Wednesday after the Calgary, Canada-based company boosted its second-quarter profit outlook, on the back of rapidly increasing demand for fertilizer and a healthy farm retail sector.
Agrium's stock peaked at a record $101.97 early Wednesday, and rested up $7.90, or 8.6%, to $100.06 in early afternoon trading in New York.
The smallest of Canada's three potash producers said it expects to earn between $2.80 and $3.00 per share in the second quarter, up from the previous outlook of $1.92 to $2.22, a result of "very strong results" from its retail and wholesale operations, with half of the increase coming from retail.
Excellent results are "particularly impressive given that the North American spring application season has been hampered by excessively cold and we weather this year," said Agrium Chief Executive, Michael M. Wilson. "Continued strong global crop prices have created unprecedented demand for crop inputs and we foresee an extended demand-driven cycle."
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)
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. (See Agrium's Fertilizer Hit Paydirt)
"It's just evidence of how strong the ag cycle is," Chief Financial Officer Bruce Waterman said.
The improved outlook beat market expectations. Analysts polled by Thomson Financial had expected Agrium to earn $2.50 per share
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