We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is The Mosaic Company (MOS) Down 4.2% Since the Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for The Mosaic Company (MOS - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted 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 Q1 Earnings & Revenues Miss Estimates
Mosaic 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 $0.73 per share recorded a year ago.
Earnings, barring one-time items, were $0.04 per share that missed the Zacks Consensus Estimate of $0.19.
The 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.
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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 13.8% due to these changes.
At this time, Mosaic's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our style scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is The Mosaic Company (MOS) Down 4.2% Since the Last Earnings Report?
It has been about a month since the last earnings report for The Mosaic Company (MOS - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted 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 Q1 Earnings & Revenues Miss Estimates
Mosaic 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 $0.73 per share recorded a year ago.
Earnings, barring one-time items, were $0.04 per share that missed the Zacks Consensus Estimate of $0.19.
The 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.
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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 13.8% due to these changes.
The Mosaic Company Price and Consensus
The Mosaic Company Price and Consensus | The Mosaic Company Quote
VGM Scores
At this time, Mosaic's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our style scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.