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MOS Q3 Earnings Miss Estimates on Higher Costs, Lower Volumes
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Key Takeaways
MOS reported loss of 19 cents per share as net sales fell 10.2% amid higher costs and lower volumes.
Mosaic's segments saw lower sales volumes and contracting gross margins.
MOS expects continued Q4 cost pressures, with 2026 potash production pegged at 8.6 million tons.
The Mosaic Company (MOS - Free Report) reported a third-quarter 2026 net loss of $72.1 million or 23 cents per share against earnings of $411.4 million or $1.29 per share in the year-ago quarter.
Barring one-time items, adjusted loss was 19 cents per share against earnings of $1.04 a year ago. The loss was wider than the Zacks Consensus Estimate of 3 cents.
Net sales declined 10.2% year over year to $3.1 billion but beat the consensus estimate of $3.08 billion by 0.7%. Lower sales volumes and higher raw material costs weighed on results despite stronger phosphate prices.
The Mosaic Company Price, Consensus and EPS Surprise
MOS’ Phosphate segment generated net sales of $1.3 billion, nearly flat compared with $1.29 billion a year ago. Sales volumes declined to 1.4 million tons from 1.6 million tons due to production curtailments amid limited affordable sulfur availability. Net sales beat our estimate of $1.14 billion. Gross margin deteriorated to negative $105 per ton from positive $92 per ton. The average DAP selling price increased to $838 per ton from $714 per ton.
The Potash segment delivered net sales of $643 million, down from $695 million a year ago. Sales volumes declined to 2.1 million tons from 2.3 million tons, reflecting routine turnarounds and geological challenges at Esterhazy. Net sales outpaced our estimate of $590.6 million. Gross margin fell to $97 per ton from $104 per ton, while the average MOP selling price increased to $276 per ton from $271 per ton.
Mosaic Fertilizantes reported net sales of $1.25 billion, down from $1.59 billion in the year-ago quarter. Sales volumes fell to 1.9 million tons from 2.8 million tons, primarily due to curtailed domestic production and limited customer credit availability. Revenues were below our estimate of $1.43 billion. Gross margin contracted to $14 per ton from $65 per ton, despite the average finished product selling price increasing to $625 per ton from $518 per ton.
Mosaic's Financial Position and Cash Flow
Mosaic ended the quarter with cash and cash equivalents of $272.6 million compared with $276.6 million at the end of 2025. Long-term debt, excluding current maturities, increased to $5.33 billion from $4.25 billion. The company refinanced and extended all long-term debt maturities through 2028, while its $2.5 billion revolving credit facility remained fully available.
Cash flow from operating activities increased to $284.4 million from $228.5 million a year ago, supported by lower finished goods inventories. Capital expenditures declined to $281.5 million from $364.4 million, resulting in free cash flow of approximately $2 million against negative $135 million a year ago. MOS paid a regular dividend of 22 cents per share during the quarter.
MOS' Fourth-Quarter Outlook Reflects Cost Pressures
For the fourth quarter of 2026, Mosaic expects phosphate sales volumes of 1.3-1.6 million tons, with DAP prices of $820-$840 per ton. Potash sales volumes are projected at 2.3-2.6 million tons, with MOP prices of $255-$275 per ton.
Phosphate adjusted EBITDA is expected to decline further as higher-cost raw materials flow through inventories. The company expects fourth-quarter Mosaic Fertilizantes adjusted EBITDA to remain below third-quarter levels, reflecting production curtailments and seasonality. However, working capital improvements and a sulfur supply contract settled at $615 per long ton are expected to support cash flow.
Mosaic now expects full-year potash production of 8.6 million tons, reflecting lower-than-expected ore grades at Esterhazy. The company continues to target annual potash production exceeding 9 million tons over the long term.
For 2026, capital expenditures are projected at $1.2 billion, with spending targeted below $1 billion in 2027. The company expects depreciation, depletion and amortization of $1.1-$1.2 billion, SG&A expenses of $510-$530 million, net interest expense of $240-$260 million and cash taxes of $175-$225 million.
MOS’ Price Performance
MOS' shares have lost 29.7% in the past year compared with the industry’s 42.3% decline.
Image Source: Zacks Investment Research
MOS’ Zacks Rank & Key Picks
MOS currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Element Solutions Inc. (ESI - Free Report) and Avino Silver & Gold Mines Ltd. (ASM - Free Report) .
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.70 per share, indicating a 66.2% year-over-year surge. RS shares have gained 60.4% over the past year.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6%.
The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 75%.
View the Zacks #1 Rank List
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MOS Q3 Earnings Miss Estimates on Higher Costs, Lower Volumes
Key Takeaways
The Mosaic Company (MOS - Free Report) reported a third-quarter 2026 net loss of $72.1 million or 23 cents per share against earnings of $411.4 million or $1.29 per share in the year-ago quarter.
Barring one-time items, adjusted loss was 19 cents per share against earnings of $1.04 a year ago. The loss was wider than the Zacks Consensus Estimate of 3 cents.
Net sales declined 10.2% year over year to $3.1 billion but beat the consensus estimate of $3.08 billion by 0.7%. Lower sales volumes and higher raw material costs weighed on results despite stronger phosphate prices.
The Mosaic Company Price, Consensus and EPS Surprise
The Mosaic Company price-consensus-eps-surprise-chart | The Mosaic Company Quote
MOS' Segment Highlights
MOS’ Phosphate segment generated net sales of $1.3 billion, nearly flat compared with $1.29 billion a year ago. Sales volumes declined to 1.4 million tons from 1.6 million tons due to production curtailments amid limited affordable sulfur availability. Net sales beat our estimate of $1.14 billion. Gross margin deteriorated to negative $105 per ton from positive $92 per ton. The average DAP selling price increased to $838 per ton from $714 per ton.
The Potash segment delivered net sales of $643 million, down from $695 million a year ago. Sales volumes declined to 2.1 million tons from 2.3 million tons, reflecting routine turnarounds and geological challenges at Esterhazy. Net sales outpaced our estimate of $590.6 million. Gross margin fell to $97 per ton from $104 per ton, while the average MOP selling price increased to $276 per ton from $271 per ton.
Mosaic Fertilizantes reported net sales of $1.25 billion, down from $1.59 billion in the year-ago quarter. Sales volumes fell to 1.9 million tons from 2.8 million tons, primarily due to curtailed domestic production and limited customer credit availability. Revenues were below our estimate of $1.43 billion. Gross margin contracted to $14 per ton from $65 per ton, despite the average finished product selling price increasing to $625 per ton from $518 per ton.
Mosaic's Financial Position and Cash Flow
Mosaic ended the quarter with cash and cash equivalents of $272.6 million compared with $276.6 million at the end of 2025. Long-term debt, excluding current maturities, increased to $5.33 billion from $4.25 billion. The company refinanced and extended all long-term debt maturities through 2028, while its $2.5 billion revolving credit facility remained fully available.
Cash flow from operating activities increased to $284.4 million from $228.5 million a year ago, supported by lower finished goods inventories. Capital expenditures declined to $281.5 million from $364.4 million, resulting in free cash flow of approximately $2 million against negative $135 million a year ago. MOS paid a regular dividend of 22 cents per share during the quarter.
MOS' Fourth-Quarter Outlook Reflects Cost Pressures
For the fourth quarter of 2026, Mosaic expects phosphate sales volumes of 1.3-1.6 million tons, with DAP prices of $820-$840 per ton. Potash sales volumes are projected at 2.3-2.6 million tons, with MOP prices of $255-$275 per ton.
Phosphate adjusted EBITDA is expected to decline further as higher-cost raw materials flow through inventories. The company expects fourth-quarter Mosaic Fertilizantes adjusted EBITDA to remain below third-quarter levels, reflecting production curtailments and seasonality. However, working capital improvements and a sulfur supply contract settled at $615 per long ton are expected to support cash flow.
Mosaic now expects full-year potash production of 8.6 million tons, reflecting lower-than-expected ore grades at Esterhazy. The company continues to target annual potash production exceeding 9 million tons over the long term.
For 2026, capital expenditures are projected at $1.2 billion, with spending targeted below $1 billion in 2027. The company expects depreciation, depletion and amortization of $1.1-$1.2 billion, SG&A expenses of $510-$530 million, net interest expense of $240-$260 million and cash taxes of $175-$225 million.
MOS’ Price Performance
MOS' shares have lost 29.7% in the past year compared with the industry’s 42.3% decline.
Image Source: Zacks Investment Research
MOS’ Zacks Rank & Key Picks
MOS currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Element Solutions Inc. (ESI - Free Report) and Avino Silver & Gold Mines Ltd. (ASM - Free Report) .
RS and ESI currently sport a Zacks Rank #1 (Strong Buy), while ASM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.70 per share, indicating a 66.2% year-over-year surge. RS shares have gained 60.4% over the past year.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6%.
The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 75%.