Mosaic (MOS) to Report Q3 Earnings: What's in the Cards?
The Mosaic Company MOS is set to release third-quarter 2023 results on Nov 7, after the closing bell.
The fertilizer maker delivered a negative earnings surprise of around 9.7%, on average, over the trailing four quarters. It delivered a negative earnings surprise of roughly 2.8% in the last reported quarter. The company’s third-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 33.2% in the past year compared with a 32.8% 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 third-quarter consolidated sales is currently pegged at $3,159.2 million, calling for a decline of 40.9% 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 third 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 and affordable inputs. 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. MOS, in September, said that its potash sales volumes rose 4% year over year in the first two months of the third quarter of 2023. It sees potash sales volumes to be close to the upper end of its previous guidance of 2.1-2.3 million tons. This reflects the continued robust demand in North America. Our estimate for potash sales volumes for the third quarter is pegged at 2.295 million tons, reflecting a year-over-year increase of 7.1%.
Per the company, phosphate sales volumes rose 10.4% year over year in the first two months of the third quarter of 2023. The company anticipates third-quarter sales volumes to be in the range of 1.6-1.8 million tons. However, shipments during the quarter were affected by Hurricane Idalia, necessitating a brief proactive production halt.
In Louisiana, an unforeseen local utility power disruption at the end of August also led to damage at Louisiana's Uncle Sam facility, specifically the largest sulfuric acid plant. Our estimate for phosphate sales volumes for the third quarter stands at 1.667 million tons, indicating a year-over-year increase of 1%.
Moreover, weaker potash and phosphate prices may have impacted the company’s margins. 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 year-over-year fertilizer prices are expected to have weighed on the company’s profitability in the September quarter.
Our estimate for average selling price per ton for the Potash segment is pegged at $282, reflecting a year-over-year decline of 57.9%. We also expect average selling price per ton for the Phosphate unit to be $504, indicating a 45.4% year-over-year 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 -2.50%. The Zacks Consensus Estimate for earnings for the third quarter is currently pegged at 80 cents. 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 #3.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Pan American Silver Corp. PAAS, which is scheduled to release earnings on Nov 7, has an Earnings ESP of +4.60% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for PAAS for the third quarter is currently pegged at 7 cents.
Kinross Gold Corporation KGC, scheduled to release third-quarter earnings on Nov 8, has an Earnings ESP of +5.32%.
The Zacks Consensus Estimate for Kinross' earnings for the third quarter is currently pegged at 10 cents. KGC currently carries a Zacks Rank #3.
Innospec Inc. IOSP, scheduled to release earnings on Nov 7, has an Earnings ESP of +1.73% and carries a Zacks Rank #3.
The consensus estimate for IOSP’s earnings for the third quarter is currently pegged at $1.45.
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Kinross Gold Corporation (KGC) : Free Stock Analysis Report
The Mosaic Company (MOS) : Free Stock Analysis Report
Pan American Silver Corp. (PAAS) : Free Stock Analysis Report
Innospec Inc. (IOSP) : Free Stock Analysis Report
