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Mosaic's (MOS) Q1 Earnings Top Estimates, Revenues Lag
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The Mosaic Company (MOS - Free Report) reported a net income of $45.2 million or 14 cents per share in first-quarter 2024, down from a profit of $434.8 million or $1.28 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 65 cents, beating the Zacks Consensus Estimate of 60 cents.
Net sales declined nearly 26% year over year to $2,679.4 million in the quarter. The metric lagged the Zacks Consensus Estimate of $2,825.7 million.
The Mosaic Company Price, Consensus and EPS Surprise
Net sales in the Potash segment were $643 million in the reported quarter, down around 29% from $907 million in the prior-year quarter. Sales volumes totaled 2.2 million tons, up 16% year over year. The figure is higher than our estimate of 2.1 million tons. The segment’s gross margin declined to $98 per ton from $216 per ton in the year-ago quarter.
The Phosphate division’s net sales were $1.2 billion, down 14% from $1.4 billion in the prior-year period. Sales volume in the segment totaled 1.6 million tons, down from 1.8 million tons last year. The figure trailed our estimate of 1.7 million tons. The gross margin in the quarter was $97 per ton, down from $141 per ton in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were $886 million in the quarter, down about 32% year over year. Sales volume in the quarter fell 19% to 1.7 million tons. The figure is lower than our estimate of 2.1 million tons. The gross margin in the quarter was $44 per ton, up from $(1) per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $336.7 million, down 27.5% year over year. Long-term debt was $3,221.7 million, up 34% year over year.
Net cash used in operating activities was $80 million in the reported quarter.
Outlook
In 2024, agricultural fundamentals are strong, with grains and oilseeds stock-to-use ratios expected to remain under pressure, MOS noted. Although corn and soybean prices have softened, farmers worldwide remain profitable. The expected transition from El Niño to La Niña could benefit regions like Southeast Asia, India and Brazil. Many growers in certain parts of the world, after years of reduced fertilizer use, are aiming to restore soil nutrients.
North America's spring planting season is ending, but other regions will ramp up fertilizer demand in the coming months. Despite credit and liquidity issues in Brazil, low inventory and positive demand suggest peak or near-peak fertilizer shipments, per Mosaic. Potash supply constraints are likely to ease with increased exports from Belarus and Russia, while favorable palm oil fundamentals are expected to lead to demand recovery in Southeast Asian markets. Although China has temporarily resumed phosphate exports, domestic needs are expected to take priority, keeping the phosphate market tight in the year. These factors suggest that the global potash market is balanced, with ongoing pressure on phosphate supplies.
The company projects total capital expenditures for 2024 in the band of $1.1-$1.2 billion.
Price Performance
Mosaic’s shares have lost 30.9% in the past year compared with a 20.2% decline of the industry.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days.
L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents per share. The company’s shares have rallied 116.1% in the past year.
AVD is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.
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Mosaic's (MOS) Q1 Earnings Top Estimates, Revenues Lag
The Mosaic Company (MOS - Free Report) reported a net income of $45.2 million or 14 cents per share in first-quarter 2024, down from a profit of $434.8 million or $1.28 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 65 cents, beating the Zacks Consensus Estimate of 60 cents.
Net sales declined nearly 26% year over year to $2,679.4 million in the quarter. The metric lagged the Zacks Consensus Estimate of $2,825.7 million.
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 were $643 million in the reported quarter, down around 29% from $907 million in the prior-year quarter. Sales volumes totaled 2.2 million tons, up 16% year over year. The figure is higher than our estimate of 2.1 million tons. The segment’s gross margin declined to $98 per ton from $216 per ton in the year-ago quarter.
The Phosphate division’s net sales were $1.2 billion, down 14% from $1.4 billion in the prior-year period. Sales volume in the segment totaled 1.6 million tons, down from 1.8 million tons last year. The figure trailed our estimate of 1.7 million tons. The gross margin in the quarter was $97 per ton, down from $141 per ton in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were $886 million in the quarter, down about 32% year over year. Sales volume in the quarter fell 19% to 1.7 million tons. The figure is lower than our estimate of 2.1 million tons. The gross margin in the quarter was $44 per ton, up from $(1) per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $336.7 million, down 27.5% year over year. Long-term debt was $3,221.7 million, up 34% year over year.
Net cash used in operating activities was $80 million in the reported quarter.
Outlook
In 2024, agricultural fundamentals are strong, with grains and oilseeds stock-to-use ratios expected to remain under pressure, MOS noted. Although corn and soybean prices have softened, farmers worldwide remain profitable. The expected transition from El Niño to La Niña could benefit regions like Southeast Asia, India and Brazil. Many growers in certain parts of the world, after years of reduced fertilizer use, are aiming to restore soil nutrients.
North America's spring planting season is ending, but other regions will ramp up fertilizer demand in the coming months. Despite credit and liquidity issues in Brazil, low inventory and positive demand suggest peak or near-peak fertilizer shipments, per Mosaic. Potash supply constraints are likely to ease with increased exports from Belarus and Russia, while favorable palm oil fundamentals are expected to lead to demand recovery in Southeast Asian markets. Although China has temporarily resumed phosphate exports, domestic needs are expected to take priority, keeping the phosphate market tight in the year. These factors suggest that the global potash market is balanced, with ongoing pressure on phosphate supplies.
The company projects total capital expenditures for 2024 in the band of $1.1-$1.2 billion.
Price Performance
Mosaic’s shares have lost 30.9% in the past year compared with a 20.2% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Mosaic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Gold Fields Limited (GFI - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and L.B. Foster Company (FSTR - Free Report) and American Vanguard Corporation (AVD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days.
L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents per share. The company’s shares have rallied 116.1% in the past year.
AVD is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.