Mosaic Company Earnings: Profit Drop Breaks Four Consecutive Quarters of Growing Profits

The Mosaic Company (NYSE:MOS) reported its results for the second quarter. The Mosaic Company is a producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry.

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Mosaic Company The Earnings Cheat Sheet for the Second Quarter

Results: Net income for the agricultural chemicals company fell to $623.6 million ($1.40 per share) vs. $1.03 billion ($2.29 per share) a year earlier. This is a decline of 39.2% from the year earlier quarter.

Revenue: Rose 12.7% to $3.01 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MOS beat the mean analyst estimate of $1.30 per share. It beat the average revenue estimate of $2.54 billion.

Quoting Management: “Our excellent results demonstrate the strength of underlying agricultural fundamentals combined with effective execution by our businesses,” said Jim Prokopanko, President and Chief Executive Officer of Mosaic. “While we expect third quarter results to decline due to near-term macroeconomic uncertainty and cautious distributor purchasing behavior, we remain confident of the strong long-term demand prospects for our products. In this environment, we continue to focus on generating value by executing our strategy.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 38.3%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 56.4% from the year earlier quarter.

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 76.7% from the year earlier, while the figure increased 63.9% in the fourth quarter of the last fiscal year, more than twofold in the third quarter of the last fiscal year and 851.4% in the second quarter of the last fiscal year.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of $1.17 versus a mean estimate of net income of $1.27 per share.

Gross margins grew 0.5 percentage point to 29.2%. The growth seemed to be driven by increased revenue, as the figure rose 12.7% from the year earlier quarter while costs rose 11.9%.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from $1.39 per share to $1.24, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $5.31 per share, the average estimate for the fiscal year has fallen from $5.72 ninety days ago.

Competitors to Watch: Potash Corp./Saskatchewan (NYSE:POT), Agrium Inc. (NYSE:AGU), CF Industries Hldgs., Inc. (NYSE:CF), Intrepid Potash, Inc. (NYSE:IPI), Earth Sciences, Inc. (ESCI), Converted Organics Inc. (NASDAQ:COIN), and Lifosa AB (LFO1L).

Stock Performance: Shares of MOS were down 0.6% from the previous close.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com