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Agrium Inc.’s (AGU) fourth-quarter 2012 adjusted (excluding one-time items) earnings from continuing operations of $2.16 per share handily beat the Zacks Consensus Estimate of $2.02.

Profit, as reported, grew 83% year over year to $354 million (or $2.34 per share) from $193 million (or $1.20 per share) a year ago, helped by higher sales of the Canada-based fertilizer company’s crop protection products and crop nutrients. An extended fall season in the U.S. boosted the demand for its nutrients in the quarter. Agrium recorded a loss of $134 million from discontinued operations in the year-ago quarter.

For full-year 2012, reported profit climbed 9% year over year to $1,498 million or $9.55 per share. Adjusted earnings of $9.75 per share surpassed the Zacks Consensus Estimate of $9.21.

Revenues rose roughly 3% year over year to $3,261 million in the reported quarter, also beating the Zacks Consensus Estimate of $3,116 million. Higher sales in the Retail segment were partly offset by a decline in the Wholesale division.

For the full year, sales climbed 8% year over year to $16,686 million, beating the Zacks Consensus Estimate of $16,493 million.

Segment Highlights

Revenues from the Retail segment rose 8% year over year to $2 billion in the fourth quarter as favorable weather conditions and greater winter wheat plantation led to higher sales of crop protection products and crop nutrients. The company witnessed higher sales from crop nutrient (up 6%), crop protection (up 22%) and seed (up 27%) in the quarter. Segment gross profit jumped 13% year over year to a record $509 million.

The Wholesale segment sales fell 5% year over year to $1.4 billion in the quarter. Gross profit fell 12% to $490 million. The results were impacted by weak potash demand globally and weaker phosphate pricing. Nitrogen sales volume rose 6% on the back of strong domestic and international urea demand.

Potash sales volume, however, dipped 14% in the quarter as lower demand and weak pricing hurt international volumes in the quarter, offsetting a healthy increase in domestic volumes. Phosphate volume also fell 2% in the quarter.

Revenues from the Advanced Technologies division fell 4% to $140 million. Gross profit declined 13% to $33 million, impacted by new arrangements with former joint venture partners.

Financial Position

Agrium exited 2012 with cash and cash equivalents of roughly $726 million, down nearly 46% year over year. Long-term debt increased 24% year over year to $2.6 billion.

Outlook

Moving ahead, the company expects tight grain and oilseed supply to aid crop pricing in first-half 2013. It also sees higher acreage of major field crops across North America and international markets in 2013. Attractive crop nutrient prices are expected to lead to strong crop input demand.

The demand outlook for potash is favorable for the first half this year. Higher potash imports are expected in China and Brazil. However, the demand environment is expected to remain weak in India. The company expects higher potash demand in the U.S. based on high crop acreage and prices. Global potash shipments are expected to increase to between 55 million and 57 million tons this year from roughly 52 million tons in 2012.

On the phosphate front, the company does not see significant demand from India (a major phosphate import market) in first-quarter 2013. The global pricing environment is expected to remain weak.

Agrium, which is among the prominent fertilizer companies along with CF Industries (CF), Mosaic (MOS) and Potash Corp. (POT), stands to gain from rising crop prices and overall strong fundamentals for the agriculture and crop input market.

The company follows a strategy to grow along the value chain through a combination of acquisitions and organic development. The acquisition of AWB Limited has expanded Agrium’s Retail division and provided access to the growing Southeast Asia market.

Agrium currently retains a Zacks Rank #3 (Hold).