Mosaic reports 3Q results – Alert
The Mosaic Co. today reported third quarter 2015 net earnings of $160 million, compared to $202 million in the third quarter of 2014. Earnings per diluted share were $0.45 in the quarter compared to $0.54 last year. Notable items negatively impacted current quarter earnings per share by $0.17, primarily due to non-cash foreign currency transaction losses. Adjusted earnings per share, excluding notable items, were $0.62 per share in the quarter, compared to $0.56 per share last year.
Mosaic’s net sales in the third quarter were $2.1 billion, down from $2.3 billion in sales last year, as a result of lower volumes and prices. Operating earnings during the quarter were $246 million, down from $277 million a year ago. The year-over-year change was driven by lower net sales, partially offset by no restructuring expenses during the current year period.
"Over the course of the last two years, we have transformed Mosaic to become more efficient and made great progress in optimizing our balance sheet. We continued to grow adjusted earnings per share, despite notably weaker crop nutrient prices and a challenging macroeconomic environment," said Joc O’Rourke, Mosaic’s president and CEO.
"As anticipated, this quarter’s results reflect lower sequential production levels resulting in higher costs per mt at our potash and phosphate facilities during a seasonally slow demand period," said Rich Mack, Mosaic’s executive vice president and CFO. "Cost reduction efforts and focused execution helped maintain margin rates, which, in combination with our share repurchases and a lower effective tax rate, drove an improvement in adjusted earnings per share compared to a year ago."
"Mosaic maintained and will continue to maintain discipline by matching production to expected demand, and our fourth quarter guidance clearly reflects this philosophy," said O’Rourke. "Longer term, stable and profitable farm economics combined with the benefits of our strategic initiatives position Mosaic to generate attractive returns for our shareholders."
Total sales volumes for the Phosphates segment are expected to range from 1.9 to 2.2 million mt for the fourth quarter of 2015, compared to 2.4 million mt last year. Mosaic’s realized DAP price, FOB plant, is estimated to range from $410 to $440 per mt for the fourth quarter. The segment gross margin rate is estimated to be in the high teens and the operating rate is expected to be around 80 percent.
Total sales volumes for the Potash segment are expected to range from 1.8 to 2.1 million mt for the fourth quarter of 2015, compared to 2.3 million mt last year. Mosaic’s realized MOP price, FOB plant, is estimated to range from $235 to $255 per mt. Mosaic’s gross margin rate in the segment is expected to be in the mid 20 percent range during the fourth quarter, reflecting the decision to operate at lower production rates due to softer demand conditions. The company’s operating rate is expected to be around 70 percent, down from 91 percent last year.
Total sales volumes for the International Distribution segment are expected to range from 1.3 to 1.6 million mt for the fourth quarter of 2015, compared to 1.1 million mt last year. The segment gross margin per mt is estimated to be in the range of $23 to $28 per mt.