Why Aren’t Mosaic Co (MOS) Earnings Growing?

Page 1 of 2

Mosaic Co (NYSE:MOS) will release its quarterly report next Tuesday, but investors have already been nervous about demand for the company’s fertilizer products. With the stock having lost substantial ground in the past couple of months, shareholders want to know whether Mosaic earnings will recover and move higher in the near future.

Mosaic Co (NYSE:MOS)

Given that crop prices have remained reasonably high, you’d expect that farmers would still have high demand for Mosaic Co (NYSE:MOS)’s potash and phosphate-based fertilizers. But weakness in emerging markets could limit that demand until economic conditions in places like India start to improve. Let’s take an early look at what’s been happening with Mosaic over the past quarter and what we’re likely to see in its quarterly report.

Stats on Mosaic

Analyst EPS Estimate $1.15
Change From Year-Ago EPS (3.4%)
Revenue Estimate $2.70 billion
Change From Year-Ago Revenue (4.4%)
Earnings Beats in Past Four Quarters 2

Source: Yahoo! Finance.

Can Mosaic earnings turn around and move higher?
Analysts have stayed relatively firm in their estimates on Mosaic Co (NYSE:MOS) earnings over the past few months, keeping their May-quarter calls unchanged and adding a penny per share to their current full-year estimates. The stock, though, hasn’t held up well, falling almost 5% since early April.

Coming off the company’s previous quarter, Mosaic had already disappointed investors with slow growth. Although the fertilizer company managed to increase its earnings by 26% from the year-ago quarter, Mosaic Co (NYSE:MOS)’s results came in below expectations by about 8% on earnings and 2% on revenue.

Yet the global demographic trends that have existed for years continue to support the fundamentals of the fertilizer industry. In order to feed a growing world population, countries around the world need fertilizers to boost yields.

Some question, though, whether Mosaic Co (NYSE:MOS) is attacking the most profitable opportunities. Rival Potash Corp./Saskatchewan (USA) (NYSE:POT) gets a much larger percentage of its phosphate revenue from the feed and industrial market, which fetches higher margins than selling phosphates as fertilizer. Moreover, PotashCorp has impressively low costs for its namesake potash, whereas Mosaic said in mid-May that it would delay the final phase of its potash expansion strategy until conditions become more profitable in the industry.

Still, one headwind is finally disappearing for Mosaic Co (NYSE:MOS), as natural-gas prices have been on the rise. For years, Terra Nitrogen Company, L.P. (NYSE:TNH) and other nitrogen-based fertilizer companies saw their shares soar as natural gas plunged to decade-low levels on the heels of increased shale-gas production. Now, even though gas prices remain fairly low by historical standards, some of the immense price advantage of nitrogen fertilizers has disappeared, keeping Terra and its peers in a holding pattern and making Mosaic and other mined-fertilizer companies look more attractive by comparison. Moreover, even if gas starts to fall again, Mosaic has plans to boost its nitrogen capacity to become more diversified in its product offerings.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!