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Mosaic's (MOS) Q1 Earnings Beat Estimates, Revenues Lag

The Mosaic Company MOS logged profits of $157 million or 41 cents per share in first-quarter 2021 against a loss of $203 million or 54 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 57 cents that beat the Zacks Consensus Estimate of 50 cents.

Net sales rose roughly 28% year over year to $2,297.1 million in the quarter. The figure missed the Zacks Consensus Estimate of $2,314.1 million. Sales were driven by gains in all segments and higher year-over-year prices for phosphates.

The Mosaic Company Price, Consensus and EPS Surprise

The Mosaic Company Price, Consensus and EPS Surprise
The Mosaic Company Price, Consensus and EPS Surprise

The Mosaic Company price-consensus-eps-surprise-chart | The Mosaic Company Quote

Segment Highlights

Net sales in the Phosphates segment rose roughly 61.6% year over year to $1 billion in the quarter, driven by higher volumes and prices. Sales volumes in the segment increased 10.5% year over year. The segment’s gross margin per ton improved to $84 from a loss of $43 in the year-ago quarter, owing to lower conversion costs as well as higher volumes and realized prices.

Potash division’s net sales climbed around 8% year over year to $477 million driven by higher volumes. Sales volumes in the segment rose 5.2% year over year. Gross margin per ton in the quarter was $71, up around 25% year over year.

Net sales in the Mosaic Fertilizantes segment were $763 million, up around 4.4% year over year driven by higher year-over-year prices. Sales volume remained constant year over year at 2.1 million tons. Gross margin per ton in the quarter was $50, up around 56.2% year over year.

Financials

At the end of the quarter, Mosaic had cash and cash equivalents of $692 million, up around 20.6% year over year. Long-term debt fell roughly 2.5% year over year to $3,970.8 million.

Net cash provided by operating activities increased roughly 68% year over year to $318.8 million in the reported quarter.

Outlook

Moving ahead, the company noted that it expects strong fundamental trends witnessed in the last three quarters to continue through 2021. Strong crop demand, affordable inputs and favorable weather indicate strong grower economics.

Chinese phosphate exports are expected to remain low in 2021 due to high domestic demand and recent industry restructuring limit supplies available for export.

The company forecasts roughly $80-$90 per ton improvement in realized prices in the Phosphates segment sequentially in the second quarter. For the Potash segment, $20-$30 per ton improvement in realized prices is expected in the second quarter.

Price Performance

Shares of Mosaic have skyrocketed 197.4% in the past year compared with 88.6% rise of the industry.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Dow Inc. DOW, Nucor Corporation NUE and Impala Platinum Holdings Limited IMPUY.

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 93.5% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 228.4% for the current year. The company’s shares have gained 110.3% in the past year. It currently sports a Zacks Rank #1.

Impala has an expected earnings growth rate of 197.6% for the current fiscal. The company’s shares have skyrocketed 242.5% in the past year. It currently flaunts a Zacks Rank #1.

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