Mosaic Co : Mosaic 4Q Profit Falls 22% Amid Lower Phosphate Prices
07/17/2012| 07:54am US/Eastern
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By Victoria Stilwell
Mosaic Co.'s (>> Mosaic Co) fiscal fourth-quarter profit tumbled 22% as the fertilizer producer saw revenue fall slightly amid lower phosphate pricing, but posted results that were better than expected.
Mosaic--which was spun off from agribusiness giant Cargill Inc.-- has seen earnings mostly climb over the past year as global demand for fertilizer lifts sales. The company in April predicted strong volumes for its potash and phosphate fertilizers, saying demand for crop nutrients has benefited from an early spring season in North America, combined with increasing shipments to South America.
The company on Tuesday doubled its quarterly dividend to 25 cents from 12.5 cents as it continues its efforts to boost shareholder value. Mosaic had more than doubled its quarterly dividend in April to 12.5 cents a share from 5 cents a share.
Mosaic and other fertilizer producers have struggled in recent months amid a standoff with customers. Farmer demand has softened amid high prices and dealers have been slower-than-usual in securing supplies.
For the period ended May 31, Mosaic posted earnings of $507.3 million, or $1.19 a share, down from $649.2 million, or $1.45 a share, a year before. Sales slid 1.4% to $2.82 billion as growth in potash prices were offset by lower prices in phosphates.
Analysts surveyed by Thomson Reuters recently predicted per-share earnings of $1.15 on revenue of $2.55 billion.
Gross margin narrowed to 29.6% from 34.8%.
Phosphate net sales fell 5% as the average selling price decreased 14%. Potash net sales edged up 5.5%, while prices rose 13%.
Looking ahead to the fiscal first quarter, Mosaic predicted potash prices ranging from $415 to $440 per tonne, while phosphate prices are expected to range between $510 and $535 per tonne.
Shares rose 3% to $57.10 in light premarket trade. The stock is down 17% in the last 12 months through Monday's close.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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