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Mosaic's (MOS) Q1 Earnings & Revenues Miss Estimates
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The Mosaic Company (MOS - Free Report) posted net loss (on a reported basis) of $1 million or break even per share in the first quarter of 2017, as against net earnings of $257 million or 73 cents per share recorded a year ago.
Earnings, barring one-time items, were 4 cents per share that missed the Zacks Consensus Estimate of 19 cents.
The Minnesota-based company’s revenues fell roughly 5.7% year over year to $1,578 million in the reported quarter. The figure also missed the Zacks Consensus Estimate of $1,672 million.
Mosaic Company (The) Price, Consensus and EPS Surprise
Revenues from Mosaic’s Phosphates segment declined to $839 million in the first quarter of 2017, from the year-ago figure of $909 million owing to lower prices of finished products, partly offset by higher sales volume. The segment’s gross margin shrunk around 12.3% to $57 million due to lower finished product selling prices, partly offset by lower realized sulfur and ammonia costs, and unplanned operational down time at Faustina ammonia plant.
Potash division’s sales rose around 5% year over year to $414 million in the quarter, driven by higher sales volume, partly offset by lower average realized prices. Gross margin in the quarter declined 29.6% year over year to $69 million, mainly owing to lower selling prices and impact of Esterhazy skip incident, partly offset by benefits of cost reduction measures.
Revenues from the International Distribution segment went up around 4.3% year over year to $487 million owing to increased sales volumes, partly offset by lower average selling prices. Gross margin increased 133.3% to $28 million.
Financials
Mosaic’s cash and cash equivalents amounted to $675 million as of Mar 31, 2017, down around 36.1% year over year.
Long-term debt rose to $3,786.6 million as of Mar 31, 2017 from $3,774 million as of Mar 31, 2016.
Mosaic’s capital expenditures were $224 million in the reported quarter.
Operating cash flow was $146 million in the quarter, down 45.1% from $266 million in the year-ago quarter.
Outlook
According to the Executive Vice President and CFO, Rich Mack, Mosaic’s performance in the first quarter was below expectations owing to some unusual factors including ammonia plant outage, confluence of the Esterhazy skip failure, excessive rainfall at Miski Mayo and other logistical issues at Canpotex. Going ahead, the company expects higher realized prices of phosphate and potash in the second quarter, which should improve earnings of the company.
Mosaic expects phosphates sales volumes in the band of 2–2.3 million tons for the second quarter of 2017 versus 2.4 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $320–$340 per ton. The segment gross margin rate is expected to be around 10%.
Potash sales volumes have been forecast in the range of 2–2.3 million tons for the second quarter, compared with 2 million tons in the prior year quarter. Average selling price, FOB plant, is expected in the band of $170 to $185 per ton and the gross margin rate is anticipated to be roughly in the low 20% range.
Total sales volumes for the International Distribution segment are expected to range from 1.4 million–1.7 million tons for the second quarter of 2017, compared to 1.4 million tons in the prior-year quarter. The segment gross margin is estimated to be around $20 per ton.
Price Performance
Mosaic’s shares declined around 14.6% over the past three months underperforming the Zacks categorized Fertilizers industry’s 9% loss.
Kronos has an expected long-term earnings growth of 5%.
Nucor has an expected long-term earnings growth of 12%.
Univar has an expected long-term earnings growth of 9.4%.
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Mosaic's (MOS) Q1 Earnings & Revenues Miss Estimates
The Mosaic Company (MOS - Free Report) posted net loss (on a reported basis) of $1 million or break even per share in the first quarter of 2017, as against net earnings of $257 million or 73 cents per share recorded a year ago.
Earnings, barring one-time items, were 4 cents per share that missed the Zacks Consensus Estimate of 19 cents.
The Minnesota-based company’s revenues fell roughly 5.7% year over year to $1,578 million in the reported quarter. The figure also missed the Zacks Consensus Estimate of $1,672 million.
Mosaic Company (The) Price, Consensus and EPS Surprise
Mosaic Company (The) Price, Consensus and EPS Surprise | Mosaic Company (The) Quote
Segment Highlights
Revenues from Mosaic’s Phosphates segment declined to $839 million in the first quarter of 2017, from the year-ago figure of $909 million owing to lower prices of finished products, partly offset by higher sales volume. The segment’s gross margin shrunk around 12.3% to $57 million due to lower finished product selling prices, partly offset by lower realized sulfur and ammonia costs, and unplanned operational down time at Faustina ammonia plant.
Potash division’s sales rose around 5% year over year to $414 million in the quarter, driven by higher sales volume, partly offset by lower average realized prices. Gross margin in the quarter declined 29.6% year over year to $69 million, mainly owing to lower selling prices and impact of Esterhazy skip incident, partly offset by benefits of cost reduction measures.
Revenues from the International Distribution segment went up around 4.3% year over year to $487 million owing to increased sales volumes, partly offset by lower average selling prices. Gross margin increased 133.3% to $28 million.
Financials
Mosaic’s cash and cash equivalents amounted to $675 million as of Mar 31, 2017, down around 36.1% year over year.
Long-term debt rose to $3,786.6 million as of Mar 31, 2017 from $3,774 million as of Mar 31, 2016.
Mosaic’s capital expenditures were $224 million in the reported quarter.
Operating cash flow was $146 million in the quarter, down 45.1% from $266 million in the year-ago quarter.
Outlook
According to the Executive Vice President and CFO, Rich Mack, Mosaic’s performance in the first quarter was below expectations owing to some unusual factors including ammonia plant outage, confluence of the Esterhazy skip failure, excessive rainfall at Miski Mayo and other logistical issues at Canpotex. Going ahead, the company expects higher realized prices of phosphate and potash in the second quarter, which should improve earnings of the company.
Mosaic expects phosphates sales volumes in the band of 2–2.3 million tons for the second quarter of 2017 versus 2.4 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $320–$340 per ton. The segment gross margin rate is expected to be around 10%.
Potash sales volumes have been forecast in the range of 2–2.3 million tons for the second quarter, compared with 2 million tons in the prior year quarter. Average selling price, FOB plant, is expected in the band of $170 to $185 per ton and the gross margin rate is anticipated to be roughly in the low 20% range.
Total sales volumes for the International Distribution segment are expected to range from 1.4 million–1.7 million tons for the second quarter of 2017, compared to 1.4 million tons in the prior-year quarter. The segment gross margin is estimated to be around $20 per ton.
Price Performance
Mosaic’s shares declined around 14.6% over the past three months underperforming the Zacks categorized Fertilizers industry’s 9% loss.
Zacks Rank & Key Picks
Mosaic currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include Kronos Worldwide Inc (KRO - Free Report) , Nucor Corporation (NUE - Free Report) and Univar Inc. . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Kronos has an expected long-term earnings growth of 5%.
Nucor has an expected long-term earnings growth of 12%.
Univar has an expected long-term earnings growth of 9.4%.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>