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Mosaic (MOS) Misses Earnings and Revenue Estimates in Q3
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The Mosaic Company (MOS - Free Report) logged profits of $842 million or $2.42 per share in third-quarter 2022, up from $372 million or 97 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $3.22, missing the Zacks Consensus Estimate of $3.52.
Net sales rose roughly 56% year over year to $5,348.5 million in the quarter. It missed the Zacks Consensus Estimate of $6,010.1. Sales were driven by gains in all segments and higher prices.
The Mosaic Company Price, Consensus and EPS Surprise
Net sales in the Potash segment rose to around $1.4 billion in the reported quarter, up around 137% from the prior year’s quarter. The upside was driven by higher prices and volumes. Sales volumes in the segment were 2.1 million tons, up roughly 17% year over year. The segment’s gross margin per ton increased to $373 from $131 in the year-ago quarter.
The Phosphate division’s net sales rose around 23% year over year to $1.6 billion in the quarter, driven by higher prices. Sales volumes in the segment fell around 6% year over year in the quarter to 1.7 million tons. Gross margin per ton in the quarter was $217, up from $198 in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $2.6 billion in the quarter, up around 44% year over year, driven by higher year-over-year prices. Sales volume in the quarter declined around 18% year over year to 2.8 million tons. The gross margin per ton in the quarter was $123, up from $99 a year ago.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $702.8 million, down around 17% year over year. Long-term debt declined around 16% year over year to $3,329.3 million.
Net cash provided by operating activities was $888.8 million in the reported quarter, up around 110% year over year.
The company returned $1.8 billion to shareholders during the first nine months of 2022, including $1.6 billion in share repurchases.
Outlook
The company said that it expects tight grain and oilseed markets to persist through the balance of 2022 and into 2023. The war in Ukraine along with poor growing conditions in several major growing regions such as the Americas, Europe and China have led to reduced global agricultural production.
Mosaic also noted that sentiment has improved significantly from the spring season in North America, resulting in fall nutrient application rates trending toward normal levels. This is expected to deplete channel inventories. While nutrient prices remain historically elevated in Brazil, they have retreated to levels that are supporting in-country shipments, which are projected to pull year-end inventories down to levels comparable to last year. Government subsidies are also expected to remain at levels that support imports in India, per MOS.
The company forecasts total capital expenditures of $1.3 billion for full-year 2022. It projects selling, general and administrative expenses in the range of $460-$490 million.
Price Performance
Shares of Mosaic have increased 33.1% in the past year compared with a 19% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Mosaic currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Commercial Metals Company (CMC - Free Report) .
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 49% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 430.9% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 4% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 33% in a year.
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Mosaic (MOS) Misses Earnings and Revenue Estimates in Q3
The Mosaic Company (MOS - Free Report) logged profits of $842 million or $2.42 per share in third-quarter 2022, up from $372 million or 97 cents per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $3.22, missing the Zacks Consensus Estimate of $3.52.
Net sales rose roughly 56% year over year to $5,348.5 million in the quarter. It missed the Zacks Consensus Estimate of $6,010.1. Sales were driven by gains in all segments and higher prices.
The Mosaic Company Price, Consensus and EPS Surprise
The Mosaic Company price-consensus-eps-surprise-chart | The Mosaic Company Quote
Segment Highlights
Net sales in the Potash segment rose to around $1.4 billion in the reported quarter, up around 137% from the prior year’s quarter. The upside was driven by higher prices and volumes. Sales volumes in the segment were 2.1 million tons, up roughly 17% year over year. The segment’s gross margin per ton increased to $373 from $131 in the year-ago quarter.
The Phosphate division’s net sales rose around 23% year over year to $1.6 billion in the quarter, driven by higher prices. Sales volumes in the segment fell around 6% year over year in the quarter to 1.7 million tons. Gross margin per ton in the quarter was $217, up from $198 in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $2.6 billion in the quarter, up around 44% year over year, driven by higher year-over-year prices. Sales volume in the quarter declined around 18% year over year to 2.8 million tons. The gross margin per ton in the quarter was $123, up from $99 a year ago.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $702.8 million, down around 17% year over year. Long-term debt declined around 16% year over year to $3,329.3 million.
Net cash provided by operating activities was $888.8 million in the reported quarter, up around 110% year over year.
The company returned $1.8 billion to shareholders during the first nine months of 2022, including $1.6 billion in share repurchases.
Outlook
The company said that it expects tight grain and oilseed markets to persist through the balance of 2022 and into 2023. The war in Ukraine along with poor growing conditions in several major growing regions such as the Americas, Europe and China have led to reduced global agricultural production.
Mosaic also noted that sentiment has improved significantly from the spring season in North America, resulting in fall nutrient application rates trending toward normal levels. This is expected to deplete channel inventories. While nutrient prices remain historically elevated in Brazil, they have retreated to levels that are supporting in-country shipments, which are projected to pull year-end inventories down to levels comparable to last year. Government subsidies are also expected to remain at levels that support imports in India, per MOS.
The company forecasts total capital expenditures of $1.3 billion for full-year 2022. It projects selling, general and administrative expenses in the range of $460-$490 million.
Price Performance
Shares of Mosaic have increased 33.1% in the past year compared with a 19% rise of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Mosaic currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Commercial Metals Company (CMC - Free Report) .
Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 2.1% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 49% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 430.9% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 4% in a year.
Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 33% in a year.