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Weak forecast weighs on Agrium shares

NEW YORK (AP) -- Shares of fertilizer maker Agrium Inc. fell sharply Wednesday after the company's forecast for the current quarter came in well short of analyst projections.

The Canadian company warned that there are signs of weakening demand for phosphate, a key ingredient in one type of fertilizer, while uncertainty regarding supply agreements with China and India over potash fertilizer is affecting that market.

But Agrium said that higher grain prices after the severe U.S. drought this year should support global demand from farmers for fertilizer. The company sells three major types of fertilizer — nitrogen, phosphate and potash — in North and South America as well as Australia.

Agrium shares slid $10.15, or 9.5 percent, to $97 in morning trading Wednesday. Shares had gained 60 percent this year through Tuesday's close.

In the July-September quarter, its net income available to shareholders fell 57 percent to $127 million, or 80 cents per share, from $293 million, or $1.85 per share. Excluding one-time items such as environmental cleanup costs, profit came to $1.34 per share.

Revenue dropped 6 percent to $2.96 billion from $3.14 billion a year ago. The drought in the U.S. this summer and an early harvest weighed on volumes.

Analysts polled by FactSet expected $1.80 per share in profit on revenue of $3.13 billion.

Expenses also jumped 32 percent to $580 million.

For the current quarter, Agrium expects adjusted earnings of $1.50 to $1.90 per share. Analysts were predicting earnings of $2.11 per share.