A month has gone by since the last earnings report for Mosaic (
MOS Quick Quote MOS - Free Report) . Shares have added about 2.7% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
Mosaic's Q2 Earnings Beat Estimates, Revenues Lag
Mosaic logged profits of $437.2 million or $1.14 per share in second-quarter 2021, up from $47.4 million or 12 cents in the year-ago quarter. The company gained from higher prices and its transformation efforts in the quarter.
Barring one-time items, adjusted earnings per share were $1.17 that beat the Zacks Consensus Estimate of $1.01. Net sales rose roughly 37% year over year to $2,800.7 million in the quarter. The figure missed the Zacks Consensus Estimate of $2,927.8 million. Sales were driven by higher prices that more than offset reduced volumes. Segment Highlights
Net sales in the Phosphates segment rose roughly 54% year over year to $1.2 billion in the quarter, driven by increased prices. Sales volumes in the segment slipped around 11% year over year to 2 million tons. The segment’s gross margin per ton improved to $309 from $18 in the year-ago quarter as better pricing and transformation benefits more than offset reduced volumes and higher raw material costs.
Potash division’s net sales climbed around 19% year over year to $663 million driven by higher prices. Sales volumes in the segment declined around 9% year over year to 2.3 million tons. Gross margin per ton in the quarter was $217, up around 64% year over year. Net sales in the Mosaic Fertilizantes segment were $1 billion, up around 32% year over year driven by higher year-over-year prices. Sales volume fell around 8% year over year to 2.3 million tons. Gross margin per ton in the quarter was $185, up around 83% year over year. Financials
At the end of the quarter, Mosaic had cash and cash equivalents of $1,417.6 million, up around 32% year over year. Long-term debt fell roughly 12% year over year to $3,967.9 million.
Net cash provided by operating activities increased roughly 25% year over year to $1,015.1 million in the reported quarter. Outlook
Moving ahead, the company noted that it expects strong agricultural trends to continue through the second half of 2021, driving demand for fertilizers. Grower economics remain attractive in most global growing regions on strong crop demand, affordable inputs and favorable weather, the company noted.
The company forecasts $90-$100 per ton improvement in average realized price in the Phosphates segment sequentially in the third quarter. For the Potash segment, $25-$35 per ton improvement in average realized prices is expected in the third quarter. How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 59.28% due to these changes.
Currently, Mosaic has a nice Growth Score of B, however its Momentum Score is doing a bit 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.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Mosaic has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.