Fertilizer producer Agrium (TSE:AGU) (NYSE:AGU) said fiscal first quarter profit dropped due to hedging losses and higher costs in the period, which masked a 23 percent rise in sales.
The Calgary, Alberta-based company sells everything from crop nutrients to potash, herbicide and also fungicide to the agricultural industry.
In the January-March period, net earnings slumped to $155 million, or 97 cents per share, versus $171 million, or $1.09 per share, a year ago.
Removing a pre-tax loss on natural gas and other hedge positions and a share-based payment expense, the company would have earned $210 million, or $1.32 per share.
The company said sales rose 23 percent to $3.63 billion, on higher volumes across its product lines.
Agrium saw an $88-million increase in year-over-year expenses during the latest period, due to an unfavourable change in share-based payments and higher retail selling expenses, it said.
The company’s retail segment saw sales jump 35 percent to $2.5 billion, on strong demand for crop input products and services within North America.
Crop nutrient sales jumped 46 percent to $1 billion from $707 million, thanks to higher sales volume and higher nitrogen prices.
Crop protection sales were $834-million in the first quarter, a 31 percent increase over the $638-million in sales for the same period last year.
Revenue from the wholesale division dropped slightly to $1.2 billion.
Gross margins eased to 22 percent from 24.5 percent a year earlier.
Agrium is among the largest North American retailer of agricultural inputs such as seeds, nutrients and crop protection chemicals.
Its stock closed Tuesday at $84.57 on the New York Stock Exchange, and was down more than one percent before the bell on Wednesday.