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Mosaic's (MOS) Q2 Earnings Beat Estimates, Revenues Lag

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·3 min read
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The Mosaic Company MOS logged profits of $437.2 million or $1.14 per share in second-quarter 2021, up from $47.4 million or 12 cents in the year-ago quarter. The fertilizer maker gained from higher prices and its transformation efforts in the quarter.

Barring one-time items, adjusted earnings per share were $1.17 that beat the Zacks Consensus Estimate of $1.01.

Net sales rose roughly 37% year over year to $2,800.7 million in the quarter. The figure missed the Zacks Consensus Estimate of $2,927.8 million. Sales were driven by higher prices that more than offset reduced volumes.

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 54% year over year to $1.2 billion in the quarter, driven by increased prices. Sales volumes in the segment slipped around 11% year over year to 2 million tons. The segment’s gross margin per ton improved to $309 from $18 in the year-ago quarter as better pricing and transformation benefits more than offset reduced volumes and higher raw material costs.

Potash division’s net sales climbed around 19% year over year to $663 million driven by higher prices. Sales volumes in the segment declined around 9% year over year to 2.3 million tons. Gross margin per ton in the quarter was $217, up around 64% year over year.

Net sales in the Mosaic Fertilizantes segment were $1 billion, up around 32% year over year driven by higher year-over-year prices. Sales volume fell around 8% year over year to 2.3 million tons. Gross margin per ton in the quarter was $185, up around 83% year over year.

Financials

At the end of the quarter, Mosaic had cash and cash equivalents of $1,417.6 million, up around 32% year over year. Long-term debt fell roughly 12% year over year to $3,967.9 million.

Net cash provided by operating activities increased roughly 25% year over year to $1,015.1 million in the reported quarter.

Outlook

Moving ahead, the company noted that it expects strong agricultural trends to continue through the second half of 2021, driving demand for fertilizers. Grower economics remain attractive in most global growing regions on strong crop demand, affordable inputs and favorable weather, the company noted.

The company forecasts $90-$100 per ton improvement in average realized price in the Phosphates segment sequentially in the third quarter. For the Potash segment, $25-$35 per ton improvement in average realized prices is expected in the third quarter.

Price Performance

Shares of Mosaic have rallied 118.7% in the past year compared with 66.1% rise of the industry.

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Zacks Investment Research


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Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, ArcelorMittal MT and The Chemours Company CC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 444.9% for the current year. The company’s shares have surged around 138% in a year.

ArcelorMittal has an expected earnings growth rate of 1,484.4% for the current year. The company’s shares have shot up around 202% in the past year.

Chemours has an expected earnings growth rate of around 66.8% for the current fiscal. The company’s shares have rallied roughly 74% in the past year.


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