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Mosaic (MOS) to Reduce Phosphate Production Amid Weather Woes

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The Mosaic Company (MOS - Free Report) recently stated that it will reduce phosphate production for the spring season by 300,000 tons. It intends to accomplish this by changing operational production plans and maintenance schedules. The reduction is likely to affect the company’s U.S. phosphate facilities in Louisiana and Florida.

Per Mosaic, the move is in response to the persistent weather concerns across key growing regions in the United States. Higher carryover inventory levels from the fall are another factor cited by the company.

Mosaic also stated that it has been monitoring the U.S. markets and NOLA DAP (diammonium phosphate) prices. The company believes that the current margin structure is not depicting balanced market conditions. As such, it is important for the company to protect margins and customers during seasonably slow time of the year.

Mosaic’ shares have lost 9.9% in the past six months compared with the industry’s 10.2% decline.


 

Mosaic’s adjusted earnings per share (EPS) of 77 cents in the fourth quarter beat the Zacks Consensus Estimate of 57 cents.

During fourth-quarter 2018 earnings call, the company stated that it expects strong business and financial performance to continue in 2019. Mosaic projects adjusted EPS in the band of $2.10-$2.50 for 2019. It also expects adjusted EBITDA for 2019 in the range of $2.2-$2.4 billion.

Zacks Rank & Key Picks

Mosaic currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space include Kirkland Lake Gold Ltd. , Ingevity Corporation (NGVT - Free Report) and Materion Corporation (MTRN - Free Report) , all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 8.8% for 2019. The company’s shares have surged 123.5% in the past year.

Ingevity has an expected earnings growth rate of 17.9% for 2019. The company’s shares have rallied 39.2% in a year’s time.

Materion has an expected earnings growth rate of 12.6% for 2019. Its shares have gained 6.5% in a year’s time.

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