CALGARY – Fertilizer producer and retailer Agrium Inc. (TSX:AGU) has reported a 92 per cent drop in profits for the first three months of the year as the North American farmers it serves dealt with a nastier than usual winter.

The Calgary-based company said consolidated net earnings from continuing operations were $12 million, or eight cents per share, compared with $146 million, or 98 cents per share, a year earlier.

“Agrium’s first quarter is traditionally our seasonally lowest earnings quarter and this was exacerbated this year by the record cold winter across North America,” CEO Chuck Magro said in a release.

“However, farmer sentiment is positive this spring and we are now seeing good demand for crop input products and services. Agrium achieved a record $788-million in operating cash flow this quarter despite the lower net earnings as we continue to focus on reducing working capital needs.”

Agrium’s outlook for the second quarter is much brighter, calling for between $3.85 and $4.35 in diluted earnings per share from continuing operations.

Sales during the first quarter dipped modestly to $3.08 billion from $3.16 billion a year earlier.

Expenses rose eight per cent to $503 million from $466 million.

The results included a $31-million share-based payment expense, which was offset by a gain of $32 million on natural gas hedging.

Major crop prices have been strengthening, thanks to strong demand and increased uncertainty over supply. That’s good news for the fertilizers and other farm products Agrium provides, the company said.

But the start to the spring planting season in North America is later than normal because of cold, wet weather. The inability to get a record Western Canadian grain crop to market by rail has also been a challenge.

“The large North American crop in 2013, particularly in Canada, combined with the cold winter, have challenged rail and port transportation logistics so far in 2014,” Agrium said.

“In some cases, the delayed start has allowed the crop nutrient supply chain more time for product to move to market. However, constrained logistical capacity is still expected to contribute to tight supply and demand balances within regional markets this season.”