AGU again, Feb 8 2010.

Just a quick update on Agrium. The stock reported much better earnings than they “guided” a few months ago and in the euphoria of the moment the stock is up nicely. Here is the chart;

AGU Feb 8 2010

Up a few dollars so far on the day. Here is the rub; the reported earnings of 53 cents a share was down from 79 cents last year but that was an unusual year. Conveniently losses due to hedges on natural gas would have reduced the above profit by 17 cents a share. By the same logic the stock-based compensation also reduced earnings by 17 cents a share. Both of this miraculously are considered one time items – go figure are not hedges part of your operations and compensation? –this is like the consumer price index without food and energy! Anyway you treat these items as operational you have an income for the quarter of 53 – 17 – 17 = 19 cents for the quarter or 24% of last years. This time they guided more positively, maybe that accounts for the temporary rise in the stock.