Mosaic (MOS) to Report Q2 Earnings: What's in the Cards?
The Mosaic Company MOS is set to release second-quarter 2023 results on Aug 1, after the closing bell.
The fertilizer maker delivered a negative earnings surprise of around 10.8%, on average, over the trailing four quarters. It delivered a negative earnings surprise of roughly 10.9% in the last reported quarter. The company’s second-quarter results are likely to reflect favorable demand for phosphate and potash. However, weaker fertilizer prices are expected to have affected its performance.
Shares of Mosaic have lost 20.4% in the past year compared with a 22.2% decline of the industry.
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Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The Zacks Consensus Estimate for Mosaic’s second-quarter consolidated sales is currently pegged at $3,216 million, calling for a decline of 40.1% from the year-ago quarter’s tally.
Factors at Play
Mosaic is expected to have benefited from favorable demand for phosphate and potash in the second quarter. Higher agricultural commodity prices and attractive farm economics are driving demand for fertilizers globally. Farmer economics remains attractive in most global growing regions on strong crop demand, affordable inputs, and favorable weather. Demand for grains and oilseeds remains high along with strong farm economics.
Strong demand is expected to have supported the company’s potash sales volumes in the quarter to be reported. The company, last month, said that it witnessed solid spring demand in North America in the second quarter. It sees total sales volumes of the Potash unit to be near the high end of its prior stated guidance of 2.0-2.2 million tons for the quarter. Our estimate for potash sales volumes for the second quarter is pegged at 2.183 million tons, reflecting a sequential increase of 14.3%.
While demand is expected to have remained healthy in the second quarter, the postponement inventory restocking by customers in North America to the third quarter is likely to have impacted phosphate volumes in the to-be-reported quarter. The company anticipates the Phosphates unit’s sales volumes for the second quarter to be toward the low end of its previous guidance of 1.8-2.0 million tons. Our estimate for phosphate sales volumes for the second quarter stands at 1.823 million tons, indicating a sequential decline of 0.7%.
Moreover, prices of phosphate and potash retreated since the back half of 2022 from their peak levels attained in the first half riding on the impacts of the Russia-Ukraine war and disruptions due to the sanctions in Belarus. Weaker fertilizer prices are expected to have weighed on the company’s profitability in the June quarter.
Our estimate for average selling price per ton for the Potash segment is pegged at $327, reflecting a sequential decline of 31.2%. We also expect average selling price per ton for the Phosphate unit to be $600, indicating a 16.3% sequential decline.
The Mosaic Company Price and EPS Surprise
The Mosaic Company price-eps-surprise | The Mosaic Company Quote
Zacks Model
Our proven model does not conclusively predict an earnings beat for Mosaic this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Mosaic is -6.84%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Mosaic currently carries a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Ecolab Inc. ECL, slated to release earnings on Aug 1, has an Earnings ESP of +0.50% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 stocks here.
The Zacks Consensus Estimate for earnings for ECL for the second quarter is pegged at a profit of $1.21.
Axalta Coating Systems Ltd. AXTA, which is slated to release its earnings on Aug 1, has an Earnings ESP of +6.02%.
The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents. It currently carries a Zacks Rank #2.
Livent Corporation LTHM, scheduled to release earnings on Aug 3, has an Earnings ESP of +2.43% and carries a Zacks Rank #1.
The consensus estimate for LTHM’s earnings for the second quarter is currently pegged at 46 cents.
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Ecolab Inc. (ECL) : Free Stock Analysis Report
The Mosaic Company (MOS) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
Livent Corporation (LTHM) : Free Stock Analysis Report
