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Mosaic's (MOS) Q1 Earnings Miss Estimates, Revenues Beat
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The Mosaic Company (MOS - Free Report) reported first-quarter 2023 profit amounting to $434.8 million or $1.28 per share, down from $1,182 million or $3.19 per share in the prior-year quarter.
The company’s adjusted earnings amounted to $1.14, down 52.7% year over year from $2.41 per share. It lagged the Zacks Consensus Estimate of $1.28.
Net sales declined roughly 8.1% year over year to $3,604.3 million in the quarter. It surpassed the Zacks Consensus Estimate of $3,336.5 million.
The Mosaic Company Price, Consensus and EPS Surprise
Net sales in the Potash segment were around $907 million in the quarter, down from $1.1 billion a year ago. Sales volumes in the segment were 1.9 million tons, up from 1.8 million tons in the prior-year period. The segment’s gross margin per ton decreased to $216 from $323 in the year-ago quarter.
The Phosphate division’s net sales were down to $1.4 billion in the first quarter from $1.5 billion in the prior-year period. Sales volumes in the segment rose around 5.9% in the quarter to 1.8 million tons. Gross margin per ton in the quarter was $141, down from $318 in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $1.3 billion, down from $1.5 billion in the year-ago quarter. Sales volume in the quarter rose 16.7% to 2.1 million tons.
Financials
At the end of quarter, Mosaic had cash and cash equivalents of $464.8 million, down around 47.3% year over year. Long-term debt declined around 28.7% year over year to $2,408.9 million.
Net cash provided by operating activities was $149 million in the reported quarter, down from $506.2 million in the prior-year period.
Mosaic returned $608 million to shareholders during the first quarter of 2023 through share repurchase and dividends.
Outlook
Through 2023 and potentially beyond, grain and oilseed markets are anticipated to remain constrained. In addition to decreased fertilization and unfavorable weather in major growing regions, including the Americas, Europe, and China, the war's interruption of Ukraine's agricultural productivity poses a threat to world agricultural production, Mosaic noted. Therefore, the pressure on global stocks-to-use ratios, which are already expected to be near 25-year lows, is likely to persist.
A return to regular nutrient applications is expected to be supported by historically high crop prices and fertilizer prices that have retreated after the post-Ukraine invasion rise. From the second half of 2022, sentiment in North America has significantly improved, and spring nutrient application rates are trending toward normal levels. A favorable fertilizer-to-soybean barter ratio in Brazil points to a sizable recovery in fertilizer shipments in 2023.
Price Performance
Shares of Mosaic have lost 36.1% in the past year compared with the 35.2% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
MOS currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report) .
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 14% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 12.8% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 19.8% for the current year. Shares of PPG have gained 0.7% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.
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Mosaic's (MOS) Q1 Earnings Miss Estimates, Revenues Beat
The Mosaic Company (MOS - Free Report) reported first-quarter 2023 profit amounting to $434.8 million or $1.28 per share, down from $1,182 million or $3.19 per share in the prior-year quarter.
The company’s adjusted earnings amounted to $1.14, down 52.7% year over year from $2.41 per share. It lagged the Zacks Consensus Estimate of $1.28.
Net sales declined roughly 8.1% year over year to $3,604.3 million in the quarter. It surpassed the Zacks Consensus Estimate of $3,336.5 million.
The Mosaic Company Price, Consensus and EPS Surprise
The Mosaic Company price-consensus-eps-surprise-chart | The Mosaic Company Quote
Segmental Highlights
Net sales in the Potash segment were around $907 million in the quarter, down from $1.1 billion a year ago. Sales volumes in the segment were 1.9 million tons, up from 1.8 million tons in the prior-year period. The segment’s gross margin per ton decreased to $216 from $323 in the year-ago quarter.
The Phosphate division’s net sales were down to $1.4 billion in the first quarter from $1.5 billion in the prior-year period. Sales volumes in the segment rose around 5.9% in the quarter to 1.8 million tons. Gross margin per ton in the quarter was $141, down from $318 in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $1.3 billion, down from $1.5 billion in the year-ago quarter. Sales volume in the quarter rose 16.7% to 2.1 million tons.
Financials
At the end of quarter, Mosaic had cash and cash equivalents of $464.8 million, down around 47.3% year over year. Long-term debt declined around 28.7% year over year to $2,408.9 million.
Net cash provided by operating activities was $149 million in the reported quarter, down from $506.2 million in the prior-year period.
Mosaic returned $608 million to shareholders during the first quarter of 2023 through share repurchase and dividends.
Outlook
Through 2023 and potentially beyond, grain and oilseed markets are anticipated to remain constrained. In addition to decreased fertilization and unfavorable weather in major growing regions, including the Americas, Europe, and China, the war's interruption of Ukraine's agricultural productivity poses a threat to world agricultural production, Mosaic noted. Therefore, the pressure on global stocks-to-use ratios, which are already expected to be near 25-year lows, is likely to persist.
A return to regular nutrient applications is expected to be supported by historically high crop prices and fertilizer prices that have retreated after the post-Ukraine invasion rise. From the second half of 2022, sentiment in North America has significantly improved, and spring nutrient application rates are trending toward normal levels. A favorable fertilizer-to-soybean barter ratio in Brazil points to a sizable recovery in fertilizer shipments in 2023.
Price Performance
Shares of Mosaic have lost 36.1% in the past year compared with the 35.2% fall of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
MOS currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Basic Materials space include Steel Dynamics, Inc. (STLD - Free Report) , Linde plc (LIN - Free Report) and PPG Industries, Inc. (PPG - Free Report) .
Steel Dynamics currently carries a Zacks Rank #2 (Buy). Shares of STLD have gained 14% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 10.7% on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Linde, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 12.2% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.8% upward in the past 60 days. It has a trailing four-quarter earnings surprise of 6.9%, on average. The stock has gained 12.8% over the past year.
PPG Industries currently carries a Zacks Rank #2 and has a projected earnings growth rate of 19.8% for the current year. Shares of PPG have gained 0.7% in the past year. It delivered a trailing four-quarter earnings surprise of 6.8% on average.