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Why Is Mosaic (MOS) Up 2.9% 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 2.9% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Mosaic's Q2 Earnings and Revenues Miss Estimates
Mosaic reported a net loss of $161.5 million or 50 cents per share in the second quarter of 2024. This marks a deterioration from a profit of $369 million or $1.11 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 54 cents, lagging the Zacks Consensus Estimate of 68 cents.
Net sales declined nearly 17% year over year to around $2.82 billion in the quarter. The metric lagged the Zacks Consensus Estimate of $2.93 billion.
Segment Highlights
Net sales in the Potash segment were $663 million in the reported quarter, down around 22% from $849 million in the prior-year quarter. Sales volume totaled 2.3 million tons, up 4.5% year over year. The figure is higher than our estimate of 2.26 million tons. The segment’s gross margin declined to $79 per ton from $155 per ton in the year-ago quarter. The average MOP selling price fell to $224 per ton from $326 per ton a year ago.
The Phosphate division’s net sales were $1.2 billion, down from $1.3 billion in the prior-year period. Sales volume in the segment totaled 1.7 million tons, down from 1.9 million tons last year. The figure matched our estimate of 1.7 million tons. The gross margin in the quarter was $91 per ton, down from $112 per ton in the year-ago quarter. The average DAP selling price declined to $575 per ton from $585 per ton a year ago.
Net sales in the Mosaic Fertilizantes segment were $1 billion in the quarter, down about 28.5% year over year. Sales volume in the quarter fell 8% to 2.2 million tons. The figure was lower than our estimate of 2.45 million tons. The gross margin in the quarter was $46 per ton, up from $5 per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $322 million, down 48.5% year over year. Long-term debt was around $3.19 billion, up 32% year over year.
Net cash provided by operating activities was $847 million in the reported quarter.
Outlook
In 2024, grains and oilseeds stock-to-use ratios are expected to remain low, creating a constructive environment for agriculture fundamentals and economics, per Mosaic. This is likely to encourage growers to maximize their yields. The El Nino weather pattern is anticipated to transition to La Nina, benefiting agriculture in Southeast Asia, India and Brazil. Although the fundamentals and prices of corn and soybeans have softened recently, affordable nutrient prices are favorable for fertilizer demand.
North American demand remains robust, with buyers replenishing supplies after depleting their bins this spring and Brazil's in-season demand is strong due to concerns about low stocks. Global potash supply constraints are expected to ease this year with increased exports from Belarus and Russia. Recent contract settlements in China and India are expected to further stimulate buying activities in Southeast Asia and India.
Chinese phosphate exports declined by 27% or more than 1 million tons, year over year in the first six months of 2024. The long-term outlook remains favorable as China is likely to continue prioritizing domestic and industrial needs over fertilizer exports. These factors indicate that the global potash market is balanced, while the phosphate market is expected to remain tight in 2024 and beyond, Mosaic noted.
The company projects total capital expenditures for 2024 in the band of $1.1-$1.2 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.12% due to these changes.
VGM Scores
Currently, Mosaic has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Mosaic has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Mosaic belongs to the Zacks Fertilizers industry. Another stock from the same industry, Scotts Miracle-Gro (SMG - Free Report) , has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Scotts reported revenues of $1.2 billion in the last reported quarter, representing a year-over-year change of +7.5%. EPS of $2.31 for the same period compares with $1.17 a year ago.
Scotts is expected to post a loss of $1.94 per share for the current quarter, representing a year-over-year change of +30%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Scotts. Also, the stock has a VGM Score of A.
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Why Is Mosaic (MOS) Up 2.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Mosaic (MOS - Free Report) . Shares have added about 2.9% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important catalysts.
Mosaic's Q2 Earnings and Revenues Miss Estimates
Mosaic reported a net loss of $161.5 million or 50 cents per share in the second quarter of 2024. This marks a deterioration from a profit of $369 million or $1.11 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 54 cents, lagging the Zacks Consensus Estimate of 68 cents.
Net sales declined nearly 17% year over year to around $2.82 billion in the quarter. The metric lagged the Zacks Consensus Estimate of $2.93 billion.
Segment Highlights
Net sales in the Potash segment were $663 million in the reported quarter, down around 22% from $849 million in the prior-year quarter. Sales volume totaled 2.3 million tons, up 4.5% year over year. The figure is higher than our estimate of 2.26 million tons. The segment’s gross margin declined to $79 per ton from $155 per ton in the year-ago quarter. The average MOP selling price fell to $224 per ton from $326 per ton a year ago.
The Phosphate division’s net sales were $1.2 billion, down from $1.3 billion in the prior-year period. Sales volume in the segment totaled 1.7 million tons, down from 1.9 million tons last year. The figure matched our estimate of 1.7 million tons. The gross margin in the quarter was $91 per ton, down from $112 per ton in the year-ago quarter. The average DAP selling price declined to $575 per ton from $585 per ton a year ago.
Net sales in the Mosaic Fertilizantes segment were $1 billion in the quarter, down about 28.5% year over year. Sales volume in the quarter fell 8% to 2.2 million tons. The figure was lower than our estimate of 2.45 million tons. The gross margin in the quarter was $46 per ton, up from $5 per ton in the prior-year quarter.
Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $322 million, down 48.5% year over year. Long-term debt was around $3.19 billion, up 32% year over year.
Net cash provided by operating activities was $847 million in the reported quarter.
Outlook
In 2024, grains and oilseeds stock-to-use ratios are expected to remain low, creating a constructive environment for agriculture fundamentals and economics, per Mosaic. This is likely to encourage growers to maximize their yields. The El Nino weather pattern is anticipated to transition to La Nina, benefiting agriculture in Southeast Asia, India and Brazil. Although the fundamentals and prices of corn and soybeans have softened recently, affordable nutrient prices are favorable for fertilizer demand.
North American demand remains robust, with buyers replenishing supplies after depleting their bins this spring and Brazil's in-season demand is strong due to concerns about low stocks. Global potash supply constraints are expected to ease this year with increased exports from Belarus and Russia. Recent contract settlements in China and India are expected to further stimulate buying activities in Southeast Asia and India.
Chinese phosphate exports declined by 27% or more than 1 million tons, year over year in the first six months of 2024. The long-term outlook remains favorable as China is likely to continue prioritizing domestic and industrial needs over fertilizer exports. These factors indicate that the global potash market is balanced, while the phosphate market is expected to remain tight in 2024 and beyond, Mosaic noted.
The company projects total capital expenditures for 2024 in the band of $1.1-$1.2 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.12% due to these changes.
VGM Scores
Currently, Mosaic has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Mosaic has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Mosaic belongs to the Zacks Fertilizers industry. Another stock from the same industry, Scotts Miracle-Gro (SMG - Free Report) , has gained 1.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Scotts reported revenues of $1.2 billion in the last reported quarter, representing a year-over-year change of +7.5%. EPS of $2.31 for the same period compares with $1.17 a year ago.
Scotts is expected to post a loss of $1.94 per share for the current quarter, representing a year-over-year change of +30%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Scotts. Also, the stock has a VGM Score of A.