NEW YORK (AP) -- The fertilizer maker Agrium boosted its second-quarter outlook Wednesday citing strong demand.
Demand remained elevated through June even though farmers planted crops early to take advantage of the warm spring weather, the company said. With the worst drought in decades striking crops across broad regions of the country, commodity prices are already skyrocketing and Agrium said its outlook is "very positive."
The company expects to report adjusted net income of $5.40 to $5.50 in the second quarter, up from its previous estimate of $4.18 to $4.78 per share. The company said in June that it would reach the high end of that range. The estimate excludes gains and losses from hedging positions, and share-based payment expenses.
Analysts had expected Agrium to report net income of $4.73 per share, according to FactSet. The company is scheduled to report its second-quarter results on Aug. 2.
Shares of Agrium Inc. rose $3.12, or 3.4 percent, to $95.69 in midday trading.
Rival Mosaic Co. this week reported better-than-expected results for the quarter ended May 31. Mosaic sold more phosphates at higher prices than it had expected, and its net income and revenue surpassed Wall Street estimates.
Citi Investment Research analyst P.J. Juvekar said another competitor, Yara International ASA of Norway, also exceeded expectations.
"We think North American fertilizer producers are poised to benefit from higher grain prices and the growing likelihood that the U.S. will need to plant another large corn and soybean crop in 2013," he wrote. The analyst kept a "Neutral" rating on shares of Agrium, and said he prefers shares of competitor Potash Corp. of Saskatchewan.
