Mosaic Co. (NYSE: MOS): Q3 Earnings Preview 2011

Mosaic Co. (NYSE: MOS) is scheduled to release its third-quarter earnings after the closing bell on Wednesday, March 30, 2011. Analysts, on average, expect the company to report earnings of $1.07 per share on revenue of $2.35 billion. In the year ago period, the company reported earnings of $0.50 per share on revenue of $1.73 billion.

The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide.

In the preceding fiscal second quarter, the Plymouth, Minnesota-based company's net income was $1.0 billion or $2.29 per share, compared to $107.8 million or $0.24 per share in the prior year quarter. The second quarter results include a gain of $570 million or $1.28 per share on the sale of the company's interest in Fosfertil S.A. Revenue jumped 56% to $2.67 billion from $1.71 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 91 cents per share on revenue of $2.44 billion. Gross profit margin rose to 29% from 18%. 

The demand for both phosphates and potash continues to expand globally, placing Mosaic in a unique position to capitalize in markets worldwide. Fertilizer demand continues to strengthen and market segment sentiment has improved due to the rally in grain prices, lean producer inventories and the need to refill a de-stock pipeline.The broad-based rally in agricultural commodity prices translates into profitable farm economics and record or near-record farm income around the world. Expanding middle-class in China and India are demanding more meat and diverse prroduce, both of which require fertilizer-fueled farms. And in North America, famers are spending more on high-tech equipment and genetically engineered seeds. They use more fertilizer to make sure those investments pay off. Rallies in a broad array of agricultural commodity prices during the last few months are fueling an increasingly positive outlook for phosphate and potash demand. Phosphate prices have increased sharply. And potash prices have begun to move up. Given the positive demand outlook, P and K markets is likely remain tight until new capacity comes on later this decade.

At its last earnings call in January, the company said that its third quarter total phosphate sales volumes of 2.4 to 2.7 million tons. The company said that its third quarter sales volumes will be impacted by normal seasonal factors following which we expect a very good fourth quarter led by strong North American spring demand. The company expects an average DAP selling price in the third quarter of $510-540 per ton. Mosaic expects third quarter total potash sales volumes of 1.9 to 2.1 million tons and an average MLP selling price of $330-350 per ton. The company expects capital spending for fiscal 2011 to range from $1.2 to $1.4 billion. 

In Janaury, Cargill said that it plans to split off its 64% stake, or 286 million share position, in the Mosaic Co. to Cargill's equity and debt holders, the two agricultural products companies. The complicated series of transactions is expected to be completed in the next two or three years. Cargill is one of the company's biggest stake holders. For Mosaic, the deal is expected to improve its financial flexibility and increase the liquidity of its common stock. The deal is also seen as significant as it opens the door for Mosaic to potentially be acquired. On a conference call outlining the transaction, Mosaic CEO Jim Prokopanko stated that "it's possible for Mosaic to be acquired" between now and the two years that it will take for Cargill to divest its stake. 

The company's stock currently trades at a forward P/E  (fye May 31, 2012) of 14.90 and PEG Ratio (5 yr expected) of 1.31. In terms of stock performance, Mosaic shares have gained nearly 33% over the past year.

Full Disclosure: None.

Mosaic Shares Rally After USDA Cuts Crops Outlook

Shares of Mosaic Co. (NYSE: MOS) rallied as much as 4% as grain prices surged after the U.S. Department of Agriculture made another sharp cut in its outlook for global supplies. The USDA again revised downward its outlook for the size of last fall's corn and soybean harvest in the U.S. It made a surprise cut to its estimates for the size of the soybean crop, to 3.33 billion bushels from 3.38 billion. End-of-season inventories of corn, already expected to be at a 15-year low, were cut by more than 10% to 745 million bushels. Similarly, shares of rival Potash Corp. (NYSE: POT) rose more than 2% on speculation that higher grain priced will boost fertilizer demand. Shares of agribusiness giant Monsanto Co. (NYSE: MON) surged $2.47, or 3.41%, to $74.99 in afternoon trading. 

Full Disclosure: None.

Mosaic Co. (NYSE: MOS): Q2 Earnings Preview 2011

Mosaic Co. (NYSE: MOS) is scheduled to release its fiscal second-quarter financial results after the closing bell on Tuesday, January 4, 2011. Analysts, on average, expect the company to report earnings of 91 cents per share on revenue of $2.44 billion. In the year ago quarter, the company reported earnings of 32 cents per share on revenue of $1.71 billion.

Mosaic Co. engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide. The company serves customers in more than 40 countries. It is leading producer of potash in North America, with nearly 40 percent market share. It is the second-largest global potash producer, with a global market share of 13%. Mosaic is also the world’s largest integrated phosphate producer. Its share of the world phosphate production is 13 percent while its share of the US production is 58 percent.

In the preceding fiscal first quarter, the Plymouth, Minnesota-based company's net income was $297.7 million, or 67 cents a share, from $100.6 million, or 23 cents a share, in the year-earlier quarter. Revenue grew to $2.19 billion from $1.46 billion in the same quarter last year. Analysts, on average, had expected earnings of 71 cents a share on revenue of $1.96 billion. Gross margin as a percent of net sales improved to 23 percent, compared to 15 percent in the prior year.

The demand for both phosphates and potash continues to expand globally, placing Mosaic in a unique position to capitalize in markets worldwide. Fertilizer demand continues to strengthen and market segment sentiment has improved due to the rally in grain prices, lean producer inventories and the need to refill a de-stock pipeline.The broad-based rally in agricultural commodity prices translates into profitable farm economics and record or near-record farm income around the world. Rallies in a broad array of agricultural commodity prices during the last few months are fueling an increasingly positive outlook for phosphate and potash demand. Phosphate prices have increased sharply. And potash prices have begun to move up. Given the positive demand outlook, P and K markets is likely remain tight until new capacity comes on later this decade.

For the second quarter of fiscal 2011, the company expects total phosphate sales volumes of 3.3 million tons to 3.6 million tons and an average DAP selling price of $430 to $460 per ton. The company anticipates total potash sales volumes of 1.6 million tons to 1.9 million tons at average MOP selling price of $310 per ton to $340 per ton.

In terms of stock performance, Mosaic shares have gained nearly 10% since the beginning of the year. 

Full Disclosure: None.

Mosaic Co. (NYSE: MOS): Q1 Earnings Preview 2010

Mosaic Co. (NYSE: MOS), one of the world's largest producers of concentrated phosphate and potash, is scheduled to release financial results for the fiscal first quarter 2010 after the closing bell on Monday, October 4, 2010. Analysts, on average, expect the company to report earnings of 72 cents per share on revenue of $1.97 billion. In the year ago quarter, the company posted earnings of 23 cents per share on revenue of $1.46 billion.

The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide. The company serves customers in more than 40 countries. It is leading producer of potash in North America, with nearly 40 percent market share. It is the second-largest global potash producer, with a global market share of 13%. Mosaic is also the world’s largest integrated phosphate producer. Its share of the world phosphate production is 13 percent while its share of the US production is 58 percent.

In the preceding fiscal fourth quarter, the Plymouth, Minnesota-based company's net income was $396.1 million, or 89 cents per share, from $146.9 million, or 33 cents per share, in the year-earlier quarter. Revenue increased to $1.9 billion from $1.6 billion. Analysts, on average, expected the company to report earnings of 87 cents per share on revenue of $2.14 billion. 

For first quarter, the company expects total phosphate sales volumes of 2.8 million to 3.2 million tons and an average DAP selling price of $410 to $440 per ton. For the first quarter of fiscal 2011, it anticipates total potash sales volumes of 1.2 million to 1.5 million tons and an average MOP selling price of $300 to $330 per ton. 

The company is spending billions to increase its production of both phosphate fertilizers as well as potash. In fact, the company expects to reach an annual production level of 17 million tonnes by 2020. This year Mosaic will spend between $1.0 and $1.2 billion in capital expenditures.

The company is poised to benefit from elevated grain prices, strong Chinese grain demand and rapidly depleting US fertilizer inventories. Last month, grain prices surged to a 52-week high on the back of droughts in China and more recently Russia helping to create new demand for related products such as fertilizer.

Full Disclosure: None.

Mosaic Co. (NYSE: MOS): Q3 Earnings Preview 2010

Mosaic Co. (NYSE: MOS), one of the world's largest producers of concentrated phosphate and potash, is scheduled to release financial results for the fiscal third quarter 2010 after the closing bell on Wednesday, March 31, 2010. Analysts, on average, expect the company to report earnings of 62 cents per share on revenue of $1.80 billion. In the year ago quarter, the company posted earnings of 13 cents per share on revenue of $1.38 billion.

The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide. The company serves customers in more than 40 countries. It is leading producer of potash in North America, with nearly 40 percent market share. It is the second-largest global potash producer, with a global market share of 13%. Mosaic is also the world’s largest integrated phosphate producer. Its share of the world phosphate production is 13 percent while its share of the US production is 58 percent.

In the preceding fiscal second quarter, the Plymouth, Minnesota-based company reported that net income plunged 89% to $107.8 million or $0.24 per share, compared to $959.8 million or $2.15 per share, in the year-ago quarter. Quarterly revenue 43% to $1.71 billion from $3.01 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $0.35 per share on revenue of $1.68 billion. The company generated nearly $175 million in cash flow from operations this quarter despite weak potash shipments and lower selling prices throughout most of the quarter. Gross margin for the second quarter fell to 18% from 26% a year ago. The average second quarter diammonium phosphate selling price, FOB plant, was $287 per tonne, compared to $1,086 in the second quarter of last year.

The fertilizer industry was hit hard due to credit crisis as tight lending conditions hurt farmers’ ability to take on loans – preventing them not only from making capital expenditures on things like tractors and other machinery, but also hurting their ability to buy fertilizer.As a result fertilizer demand plummeted while prices crashed. However, demand for fertilizers seems likely to increase in 2010, as farmers replenish soils following two years of limited applications. The recovery in the global economy is expected to have a positive impact on the demand for phosphate and potash. Early this month, Canpotex, the exporter of Potash Corp., Mosaic and Agrium announced it was hiking its prices by $30 on potash sales which boosted prices above $400 a metric ton. Last month, another major potash exporter, Belarusian Potash Co., raised its prices by $25 a metric ton or 6% in Brazil and Asia.

"Phosphate demand is rebounding nicely, and we anticipate positive comparative volume trends over the balance of fiscal 2010. Although potash orders remained soft, sales activity picked up toward the end of the quarter and we see this trend continuing into calendar 2010," Jim Prokopanko, Mosaic's President and Chief Executive Officer said in January. He added that "prospects for phosphate and potash markets look increasingly positive at this point. We project a strong recovery in global demand and shipments this calendar year due to relatively high agricultural commodity prices, positive farm economics, and the need to restock a bare distribution channel."

The company expects Phosphates segment sales volumes for the third quarter to be in the range of 2.2 to 2.6 million tonnes. Historically, the company's shipments in its third fiscal quarter are the lowest due to seasonality. Mosaic expects third quarter realized DAP price, FOB plant, to be $310 to $350 per tonne.

Among other developments during the quarter, the fertilizer maker granted an option to Vale to purchase its minority stake in Fertilizantes Fosfatados and Fertifos Administracao e Participacao. Mosaic also granted Vale an option to purchase its Cubatao operations in Brazil.

The company's stock currently trades at a forward P/E (fye 31-May-11) of 16.15 and PEG Ratio (5 yr expected)of 2.86. In terms of stock performance, Mosaic shares are up 39% over the past year.

Full Disclosure: None.

Mosaic Co. (NYSE: MOS): Second Quarter Earnings Preview 2010

Mosaic Co. (NYSE: MOS), North America's second-largest fertilizer maker, is scheduled to release its fiscal second quarter earnings before the market open on Monday, January 4, 2010. Analysts, on average, expect the company to report earnings of 35 cents per share on revenue of $1.68 billion. In the year ago quarter, the company reported earnings of $1.12 per share on revenue of $3.01 billion.

The Mosaic Company engages in the production and marketing of concentrated phosphate and potash crop nutrients for the agriculture industry worldwide. The company serves customers in more than 40 countries. It is leading producer of potash in North America, with nearly 40 percent market share. It’s the second-largest global potash producer, with a global market share of 13%. Mosaic is also the world’s largest integrated phosphate producer. Its share of the world phosphate production is 13 percent while its share of the US production is 58 percent.

In October,the Plymouth, Minnesota-based company reported a sharp decline in first quarter profit, hurt primarily by by significant declines in market selling prices for phosphate and potash sales volumes combined with lower potash selling prices. Net income plunged 92% to $100.6 million or $0.23 per share, compared to $1.2 billion, or $2.65 per share, in the prior-year quarter. Net sales for the first quarter plummeted 66% to $1.46 billion from $4.32 billion in the same quarter last year. Analysts, on average, expected the company to earn $0.35 per share on revenue of $1.54 billion. Gross profit for the first quarter was $222.2 million or 15% of net sales, compared to $1.6 billion or 38% of net sales, in the prior year quarter. The average first quarter diammonium phosphate selling price, FOB plant, was $276 per tonne, compared to $1,013 in the first quarter of last year while the average potash selling price, FOB plant, was $382 per tonne, in the first quarter compared to $488 in the first quarter of 2008.

Mosaic generated $172 million in cash flow from operations in second quarter despite weak market condition. Gross margins improved to 14% and it expects further modest improvement in margin in fiscal 2010.

The fertilizer industry was hit hard due to credit crisis as tight lending conditions hurt farmers’ ability to take on loans – preventing them not only from making capital expenditures on things like tractors and other machinery, but also hurting their ability to buy fertilizer.As a result fertilizer demand plummeted while prices crashed. However, demand for fertilizers seems likely to increase in 2010, as farmers replenish soils following two years of limited applications. The recovery in the global economy that will have a positive impact on the crop nutrient business. "Phosphate fundamentals have improved. The potash market is evolving and we expect strong demand in calendar year 2010 for both nutrients," Jim Prokopanko, Mosaic's President and Chief Executive Officer said recently in an interview. "We like the pricing outlook for our products," says Lawrence Stranghoener, Mosaic's chief financial officer. "We're on a path to produce very attractive returns for our shareholders, and very good cash flows."

The company expects second quarter Phosphates sales volumes to be in the range of 1.8 million tonnes to 2.2 million tonnes. Mosaic expects its second quarter realized DAP price, FOB plant, to be $265 to $305 per tonne.

Among other developments, Mosaic Co. declared a quarterly dividend of 5 cents during fiscal second quarter. It will be paid Feb. 18 to shareholders of record as of Feb. 4.Mosaic continues to maintain a strong balance sheet with $2.6 billion in cash providing ample financial flexibility.

In terms of stock performance, Mosaic shares are up nearly 72% since the beginning of the year 2009.

Full Disclosure: None.