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The fertilizer maker delivered a negative earnings surprise of around 8.4%, on average, over the trailing four quarters. The company’s first-quarter results are likely to reflect favorable demand for phosphate and potash. However, weaker fertilizer prices and higher input costs are expected to have affected its performance.
Shares of Mosaic have lost 35.8% in the past year compared with a 33.6% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The Zacks Consensus Estimate for Mosaic’s first-quarter consolidated sales is currently pegged at $3,337 million, calling for a decline of 14.9% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for net sales in the Phosphates segment is currently pegged at $1,248 million, suggesting a decline of 16.6% year over year.
Moreover, the consensus mark for net sales in the Potash segment is currently pegged at $848 million, indicating a decline of 20% year over year.
The Zacks Consensus Estimate for net sales in the Mosaic Fertilizantes segment is currently pegged at $1,276 million, which calls for a decrease of 14.2% year over year.
Factors at Play
Mosaic is expected to have benefited from favorable demand for phosphate and potash in the first quarter. Higher agricultural commodity prices and attractive farm economics are driving demand for fertilizers globally. Farmer economics remains attractive in most global growing regions on strong crop demand, affordable inputs, and favorable weather. Demand for grains and oilseeds remains high along with strong farm economics.
The company is also likely to have gained from actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to have boosted its profitability. Transformational savings are also likely to have supported margins in the March quarter.
However, Mosaic is expected to have faced headwinds from high prices of key raw material in the quarter to be reported. Prices of sulfur and ammonia remain elevated, made worse by the uncertainties over the supply from Russia amid the war.
Plant shutdowns and maintenance have also led to a tight supply of raw materials. The company is expected to have faced margin pressure associated higher input costs. Some impacts of input cost inflation are likely to have continue in the first quarter.
Higher costs are also likely to have impacted margins in the Mosaic Fertilizantes segment in the first quarter. Gross margin in this unit declined around 88% year over year in the fourth quarter of 2022, hut by a decline in prices that impacted distribution and production businesses. Higher input costs also impacted margins in these businesses. Pricing and cost pressure are likely to have continued in the first quarter.
Moreover, prices of phosphate and potash retreated in the back half of 2022 from their peak levels attained in the first half riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Lower fertilizer prices are expected to have weighed on the company’s profitability.
Our proven model does not conclusively predict an earnings beat for Mosaic this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Mosaic is -6.19%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at $1.28. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Mosaic currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for Koppers’ earnings for the first quarter is pegged at 76 cents. KOP currently carries a Zacks Rank #3.
Air Products and Chemicals, Inc. (APD - Free Report) , slated to release earnings on May 9, has an Earnings ESP of +2.25%.
The consensus estimate for Air Products’ earnings for the fiscal second quarter is currently pegged at $2.64. APD currently carries a Zacks Rank #3.
Pan American Silver Corp. (PAAS - Free Report) , scheduled to release earnings on May 10, has an Earnings ESP of +28.57% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Pan American Silver’s first-quarter earnings has been revised 133.3% upward in the past 60 days. The consensus estimate for PAAS’ earnings for the first quarter is currently pegged at 7 cents.
Image: Bigstock
Mosaic (MOS) to Report Q1 Earnings: What's in the Cards?
The Mosaic Company (MOS - Free Report) is set to release first-quarter 2023 results on May 3, after the closing bell.
The fertilizer maker delivered a negative earnings surprise of around 8.4%, on average, over the trailing four quarters. The company’s first-quarter results are likely to reflect favorable demand for phosphate and potash. However, weaker fertilizer prices and higher input costs are expected to have affected its performance.
Shares of Mosaic have lost 35.8% in the past year compared with a 33.6% decline of the industry.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The Zacks Consensus Estimate for Mosaic’s first-quarter consolidated sales is currently pegged at $3,337 million, calling for a decline of 14.9% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for net sales in the Phosphates segment is currently pegged at $1,248 million, suggesting a decline of 16.6% year over year.
Moreover, the consensus mark for net sales in the Potash segment is currently pegged at $848 million, indicating a decline of 20% year over year.
The Zacks Consensus Estimate for net sales in the Mosaic Fertilizantes segment is currently pegged at $1,276 million, which calls for a decrease of 14.2% year over year.
Factors at Play
Mosaic is expected to have benefited from favorable demand for phosphate and potash in the first quarter. Higher agricultural commodity prices and attractive farm economics are driving demand for fertilizers globally. Farmer economics remains attractive in most global growing regions on strong crop demand, affordable inputs, and favorable weather. Demand for grains and oilseeds remains high along with strong farm economics.
The company is also likely to have gained from actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to have boosted its profitability. Transformational savings are also likely to have supported margins in the March quarter.
However, Mosaic is expected to have faced headwinds from high prices of key raw material in the quarter to be reported. Prices of sulfur and ammonia remain elevated, made worse by the uncertainties over the supply from Russia amid the war.
Plant shutdowns and maintenance have also led to a tight supply of raw materials. The company is expected to have faced margin pressure associated higher input costs. Some impacts of input cost inflation are likely to have continue in the first quarter.
Higher costs are also likely to have impacted margins in the Mosaic Fertilizantes segment in the first quarter. Gross margin in this unit declined around 88% year over year in the fourth quarter of 2022, hut by a decline in prices that impacted distribution and production businesses. Higher input costs also impacted margins in these businesses. Pricing and cost pressure are likely to have continued in the first quarter.
Moreover, prices of phosphate and potash retreated in the back half of 2022 from their peak levels attained in the first half riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Lower fertilizer prices are expected to have weighed on the company’s profitability.
The Mosaic Company Price and EPS Surprise
The Mosaic Company price-eps-surprise | The Mosaic Company Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Mosaic this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Mosaic is -6.19%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at $1.28. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Mosaic currently carries a Zacks Rank #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Koppers Holdings Inc. (KOP - Free Report) , slated to release earnings on May 5, has an Earnings ESP of +12.66%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Koppers’ earnings for the first quarter is pegged at 76 cents. KOP currently carries a Zacks Rank #3.
Air Products and Chemicals, Inc. (APD - Free Report) , slated to release earnings on May 9, has an Earnings ESP of +2.25%.
The consensus estimate for Air Products’ earnings for the fiscal second quarter is currently pegged at $2.64. APD currently carries a Zacks Rank #3.
Pan American Silver Corp. (PAAS - Free Report) , scheduled to release earnings on May 10, has an Earnings ESP of +28.57% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Pan American Silver’s first-quarter earnings has been revised 133.3% upward in the past 60 days. The consensus estimate for PAAS’ earnings for the first quarter is currently pegged at 7 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.