Agrium Inc. (AGU) announced that operations at its Vanscoy potash mine were suspended after its main hoist system suffered a mechanical failure.
Production had to be shut down at the mine due to the failure. As a result of the outage, Agrium will bring forward the planned turnaround to tie-in the current capacity expansion project.
Production will remain on hold until the tie-in is complete. No injuries were caused during the incident and the company does not expect any considerable impact on the workforce due to this.
Agrium’s shares are down roughly 1.5% since the announcement (based on last Friday’s close).
Agrium released its first-quarter 2014 results in May 2014. The company’s profit tumbled in the quarter as unusually cold weather in North America hit its businesses. Reduced railway availability and lower prices for nutrients in the wholesale business also weighed on the bottom line.
Agrium posted profit from continuing operations of $12 million or 8 cents per share in the reported quarter, a roughly 92% fall from $146 million or 98 cents per share logged a year ago.
Agrium registered a gain of $32 million (or 16 cents per share) on natural gas hedge positions in the quarter. Excluding that impact (and treating stock-based compensation as a normal expense), loss from continuing operations came in at 8 cents per share. Analysts polled by Zacks were expecting earnings of 4 cents per share on an average.
Revenues slipped 2% year over year to $3,079 million in the reported quarter. The decline was due to a double-digit drop in wholesale sales as a result of lower realized prices. Sales, however, edged past the Zacks Consensus Estimate of $3,072 million.
Agrium currently carries a Zacks Rank #3 (Hold) and is slated to release its second-quarter 2014 results on Aug 7.
Some other stocks worth considering in the fertilizer industry include Potash Corp. of Saskatchewan Inc. (POT), Yara International ASA (YARIY) and Chemical & Mining Co. of Chile Inc. (SQM). All of these stocks hold a Zacks Rank #2 (Buy).