Mosaic (MOS) to Report Q4 Earnings: What's in the Offing?
The Mosaic Company MOS is set to release fourth-quarter 2023 results on Feb 21, after the closing bell.
The fertilizer maker delivered a negative earnings surprise of around 11.3%, on average, over the trailing four quarters. It delivered a negative earnings surprise of 15% in the last reported quarter. The company’s fourth-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 39.5% in the past year compared with a 35.9% 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 fourth-quarter consolidated sales is currently pegged at $3,009.8 million, calling for a decline of 32.8% 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 fourth 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. The company, in December, reported combined sales volumes for October and November 2023. Its potash sales volumes rose around 31.3% year over year in the first two months of the fourth quarter of 2023. Our estimate for potash sales volumes for the fourth quarter is pegged at 2.464 million tons, reflecting a year-over-year increase of 32.3%.
Moreover, MOS’s phosphate sales volumes rose 11.5% year over year in the first two months of the fourth quarter of 2023. Our estimate for phosphate sales volumes for the fourth quarter stands at 1.640 million tons, indicating a year-over-year increase of 4.4%.
Weaker potash and phosphate prices may have impacted the company’s margins. Prices of phosphate and potash have 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 December quarter.
Our estimate for average selling price per ton for the Potash segment is pegged at $237, reflecting a year-over-year decline of 61.1%. We also expect average selling price per ton for the Phosphate unit to be $532, indicating a 33% year-over-year decline.
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 -6.48%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at 82 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:
Nutrien Ltd. NTR, scheduled to release earnings on Feb 21, has an Earnings ESP of +39.72% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for NTR’s earnings for the fourth quarter is currently pegged at 72 cents.
Eldorado Gold Corporation EGO, slated to release earnings on Feb 22, has an Earnings ESP of +3.53% and carries a Zacks Rank #2 at present.
The consensus mark for EGO’s fourth-quarter earnings is currently pegged at 21 cents.
Franco-Nevada Corporation FNV, scheduled to release fourth-quarter earnings on Mar 5, has an Earnings ESP of +0.63%.
The Zacks Consensus Estimate for FNV's earnings for the fourth quarter is currently pegged at 80 cents. FNV currently carries a Zacks Rank #3.
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The Mosaic Company (MOS) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
Eldorado Gold Corporation (EGO) : Free Stock Analysis Report
Nutrien Ltd. (NTR) : Free Stock Analysis Report
