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Why Is Mosaic (MOS) Up 7.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Mosaic (MOS - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mosaic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Mosaic's Q3 Earnings Miss Estimates, Revenues Beat
Mosaic reported a net loss of $4.2 million or a penny per share in third-quarter 2023, down from a profit of $841.7 million or $2.42 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 68 cents, missing the Zacks Consensus Estimate of 80 cents.
Net sales declined nearly 33.7% year over year to $3.55 billion in the quarter. The metric surpassed the Zacks Consensus Estimate of $3.16 billion. Lower selling prices primarily caused the downside.
Segment Highlights
Net sales in the Potash segment were $720 million in the reported quarter, down around 48.6% from $1.4 billion in the prior year’s quarter. Sales volumes totaled 2.2 million tons, up 4.7% year over year. The figure is lower than our estimate of 2.295 million tons. The segment’s gross margin declined to $95 per ton from $373 per ton in the year-ago quarter.
The Phosphate division’s net sales were $1 billion, down 37.5% from $1.6 billion in the prior-year period. Sales volumes in the segment totaled 1.7 million tons (flat year over year), higher than our estimate of 1.667 million tons. The gross margin in the quarter was $53 per ton, down from $217 per ton in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $1.7 billion in the quarter, down about 34.6% year over year. Sales volume in the quarter increased 10.7% to 3.1 million tons. The gross margin in the quarter was $35 per ton, down from $118 per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $591 million, down 15.9% year over year. Long-term debt was around $2.4 billion, down 27.8% year over year.
Net cash provided by operating activities declined nearly 27.1% year over year to $647.4 million in the reported quarter.
Outlook
The company expects the global grain and oilseed markets to remain tight into 2024. Geopolitical unrest, extreme weather, and reduced fertilization are affecting crop production. Strong demand from demographic shifts and renewable fuel consumption is straining stocks. Growers are focused on maximizing yields, leading to increased fertilizer application in North America and Brazil. Potash and phosphate inventories are depleted in major growing regions, necessitating replenishment in 2024.
Potash supply is uncertain, with Belarusian exports down by 34 million tons due to sanctions and limited growth expected in 2024. China prioritizes domestic demand over phosphate exports, keeping global markets tight throughout the year and into 2024.
The company projects total capital expenditures for 2023 in the band of $1.3-$1.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted -6.94% due to these changes.
VGM Scores
Currently, Mosaic has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Mosaic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Mosaic is part of the Zacks Fertilizers industry. Over the past month, Nutrien (NTR - Free Report) , a stock from the same industry, has gained 0.4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Nutrien reported revenues of $5.63 billion in the last reported quarter, representing a year-over-year change of -31.2%. EPS of $0.35 for the same period compares with $2.51 a year ago.
Nutrien is expected to post earnings of $1.01 per share for the current quarter, representing a year-over-year change of -50%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.4%.
Nutrien has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Mosaic (MOS) Up 7.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Mosaic (MOS - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mosaic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Mosaic's Q3 Earnings Miss Estimates, Revenues Beat
Mosaic reported a net loss of $4.2 million or a penny per share in third-quarter 2023, down from a profit of $841.7 million or $2.42 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 68 cents, missing the Zacks Consensus Estimate of 80 cents.
Net sales declined nearly 33.7% year over year to $3.55 billion in the quarter. The metric surpassed the Zacks Consensus Estimate of $3.16 billion. Lower selling prices primarily caused the downside.
Segment Highlights
Net sales in the Potash segment were $720 million in the reported quarter, down around 48.6% from $1.4 billion in the prior year’s quarter. Sales volumes totaled 2.2 million tons, up 4.7% year over year. The figure is lower than our estimate of 2.295 million tons. The segment’s gross margin declined to $95 per ton from $373 per ton in the year-ago quarter.
The Phosphate division’s net sales were $1 billion, down 37.5% from $1.6 billion in the prior-year period. Sales volumes in the segment totaled 1.7 million tons (flat year over year), higher than our estimate of 1.667 million tons. The gross margin in the quarter was $53 per ton, down from $217 per ton in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $1.7 billion in the quarter, down about 34.6% year over year. Sales volume in the quarter increased 10.7% to 3.1 million tons. The gross margin in the quarter was $35 per ton, down from $118 per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $591 million, down 15.9% year over year. Long-term debt was around $2.4 billion, down 27.8% year over year.
Net cash provided by operating activities declined nearly 27.1% year over year to $647.4 million in the reported quarter.
Outlook
The company expects the global grain and oilseed markets to remain tight into 2024. Geopolitical unrest, extreme weather, and reduced fertilization are affecting crop production. Strong demand from demographic shifts and renewable fuel consumption is straining stocks. Growers are focused on maximizing yields, leading to increased fertilizer application in North America and Brazil. Potash and phosphate inventories are depleted in major growing regions, necessitating replenishment in 2024.
Potash supply is uncertain, with Belarusian exports down by 34 million tons due to sanctions and limited growth expected in 2024. China prioritizes domestic demand over phosphate exports, keeping global markets tight throughout the year and into 2024.
The company projects total capital expenditures for 2023 in the band of $1.3-$1.4 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted -6.94% due to these changes.
VGM Scores
Currently, Mosaic has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Mosaic has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Mosaic is part of the Zacks Fertilizers industry. Over the past month, Nutrien (NTR - Free Report) , a stock from the same industry, has gained 0.4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Nutrien reported revenues of $5.63 billion in the last reported quarter, representing a year-over-year change of -31.2%. EPS of $0.35 for the same period compares with $2.51 a year ago.
Nutrien is expected to post earnings of $1.01 per share for the current quarter, representing a year-over-year change of -50%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.4%.
Nutrien has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.