The Mosaic Co. reported record third-quarter net earnings of $542.1 million ($1.21 per diluted share) for the quarter ending Feb. 28, 2011, compared to the year-ago $222.6 million ($.50 per share). Third-quarter sales were $2.2 billion, up from the year-ago $1.7 billion.
“Our record third-quarter results reflect outstanding market fundamentals and effective operational execution,” said Jim Prokopanko, Mosaic president and CEO. “The world’s expanding need for food reinforces strong, long-term demand for crop nutrients. We are executing our strategy to increase potash capacity, leverage our scale, and improve operations. With robust earnings, healthy margins, and a strong balance sheet, Mosaic is well positioned for future growth.”
He told analysts March 31 that with U.S. corn inventories at all-time lows, two years of bumper crops are needed to move to more secure stock levels.
Mosaic also reported increased gross margins and operating earnings, which it said were primarily due to significantly higher phosphate selling prices and the favorable effect of higher potash production, partially offset by higher raw material costs in the phosphate sector. Gross margins were $853.6 million, up from the year-ago $476.5 million, while operating earnings nearly doubled, to $770.8 million from the year-ago $388.9 million.
Third-quarter potash operating income was $413.9 million on sales of $757.7 million, compared to the year-ago $326 million on sales of $730 million. Third-quarter potash tons sold were off slightly, to 1.863 million mt from the year-ago 1.88 million mt, while the average price was up slightly, to $358/mt from $356/mt. Production was 2 million mt, or 90 percent of capacity, an increase from the year-ago 1.3 million mt, or 59 percent capacity. Mosaic did note that it hit a salt seam in one of its mines, but that this caused only minor delays and that it is current on all of its shipping. International MOP prices moved up 14 percent, to $316/mt from the year-ago $278/mt, while domestic prices were up 7 percent, to $394/mt from the year-ago $368/mt.
Third-quarter phosphate income was $371.8 million on sales of $1.46 billion, compared to the year-ago income of $52.9 million on sales of $1.02 billion. Phosphate tons sold were 2.37 million mt, down slightly from the year-ago 2.47 million mt. The average DAP price, however, was up 62 percent to $543/mt from the year-ago $336/mt, while crop nutrient blends were up 32 percent, to $503/mt from $380/mt. Production was 2 million mt, or 83 percent of capacity, compared to the year-ago 1.9 million mt, or 75 percent capacity. Input costs were up for the phosphate segment, with sulfur prices up a whopping 127 percent to $166/lt from the year-ago $73/lt, while ammonia was up 49 percent, to $406/mt from the year-ago $272/mt.
Mosaic also pulled in $40 million in insurance proceeds during the quarter, much of that from business interruption insurance from a few years ago.
Mosaic nine-month earnings were $1.865 billion ($4.17 per share) on sales of $7.07 billion, up from the year-ago $431 million ($.97 per share) on sales of $4.9 billion. Nine-month results included a $685.6 million gain from the sale of Fosfertil assets to Vale S.A.
Nine-month potash income was $883.3 million on sales of $2.08 billion, up from the year-ago $575.9 million on sales of $1.48 billion. Some 5.34 million mt of potash were sold during the period, up from the year-ago 3.7 million mt. The average MOP price was down 5 percent for the period, to $340/mt from the year-ago $359/mt. International MOP prices remained about level for the nine months at $292/mt, up from the year-ago $291/mt, while domestic prices were off 9 percent, to $366/mt from the year-ago $400/mt.
Nine-month phosphate income was $952.1 million on sales of $5.01 billion, up from the year-ago $128.4 million on sales of $3.54 billion. Some 9.12 million mt of phos