Mosaic Shows Huge Decline In Earnings & Margin (MOS)

The Mosaic Company (NYSE: MOS) has posted its third quarter earnings, and the results show some serious declines in operating income and in margins.  Net earnings fell to $273 million from $542 million a year ago due to lower potash volumes and higher phosphate raw material costs. Earnings per share fell to $0.64 in the quarter from $1.21 in the same quarter last year, although earnings were negatively impacted by notable items totaling $0.08 per share mostly tied to foreign currency transaction losses.

Mosaic’s net sales were flat at $2.2 billion in the third quarter as growth in phosphate sales was offset by declines in potash sales.  Thomson Reuters had sales targeted at $2.5 billion.

The company report showed that the quarter’s gross margin was down to $522 million, or 24% of net sales, but that is down from $854 million and down from 39% of net sales from a year ago due mostly to lower potash volumes and higher phosphate raw material costs.

Cash flow provided by operating activities in the third quarter of fiscal 2012 was $405 million compared to $366 million in the prior year, and the company’s cash and cash equivalents were $3.2 billion and long-term debt was $1.0 billion as of February 29, 2012.

Mosaic shares closed down 0.6% at $58.22 and shares are indicated down around $58.00 in the after-hours.

JON C. OGG