Citing a near-term imbalance in the demand and supply of phosphate, the Mosaic Company (NYSE:MOS) announced plans to reduce phosphate production by up to 250,000 tons in the March 2012 quarter.
Jim Prokopanko, president and chief executive officer, explained: “Isolated phosphate market spot prices have become disconnected with the underlying agricultural fundamentals. As dealers and distributors focus on the macroeconomic uncertainty and delay purchases for the North American Spring Season, near term supply of phosphate barges on the Mississippi River has exceeded near-term demand. The current spot prices in this market do not reflect our outlook for the business, nor do we think they are sustainable. In response, we have decided to cut planned production by 250,000 tons over the next three months.”
However, Prokopanko is confident that “strong farmer economics and agricultural fundamentals will ultimately prevail over the near-term cautious sentiment.”
The company is expected to give guidance for its third fiscal quarter on January 4, 2012, along with its earnings release for the second quarter.
It’s also worth noting these top insiders dumped shares of Mosaic in Q3: Grant Hugh, Chairman, President & CEO, sold 150,620 shares, worth $11,296,500; Begemann Brett D, EVP & Chief Commercial Officer, sold 35,437 shares, worth $2,693,200; and, Madere Consuelo E., VP, Global Veg/Asia Commercial, sold 1,227 shares, worth $95,700.
Here’s how Mosaic shares are reacting to the news:
Mosaic Co. (NYSE:MOS): MOS shares recently traded at $49.82, down $0.47, or 0.93%. They have traded in a 52-week range of $44.86 to $89.24. Volume today was 2,163,603 shares versus a 3-month average volume of 6,491,780 shares. The company’s trailing P/E is 8.14, while trailing earnings are $6.12 per share.
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