By Ilan Brat
Mosaic Co., one of the world's biggest fertilizer makers, said
Tuesday its second-quarter earnings rose 57%, boosted by cost
controls and higher sales of phosphates, a key product.
Heavier sales of phosphates more than offset softer prices for
the fertilizer, which declined some 3% from a year earlier in the
quarter ended June 30. Meanwhile, an increase in potash production
helped lower overall costs even as prices climbed nearly 5% from
the previous year, bolstering profit margins.
The company's executives brushed off concerns that a steep
decline in prices for corns, soybeans and other crops in the last
two years would spur farmers to save money by curtailing their
fertilizer usage.
Chief Executive Jim Prokopanko, who steps down Wednesday, said
the second quarter, which includes the spring planting season in
North America, showed that farmers are loath to skimp on
fertilizer. "Farmers who planted crops fertilized them to maximize
yields" and revenue, he said. He added that he expected farmers to
behave similarly during the fall fertilizer-application period.
James O'Rourke, Mosaic's chief operating officer, will succeed
Mr. Prokopanko as CEO and also assume his title as president of the
company. Mr. Prokopanko will remain in an advisory role until his
planned retirement in January.
Mr. O'Rourke indicated that Mosaic will remain focused on
keeping costs low. Mosaic is one of the lowest-cost producers of
potash in Canada, and "we are positioning Mosaic on the left-hand
side of the global cost curve," he said. "We have developed a
highly resilient model for softer parts of the business cycle."
Overall, the cost of goods sold in the quarter fell 2% to $1.88
billion while sales increased to $2.49 billion from $2.44 billion.
Earnings were $391 million, or $1.08 a share, up from $248 million,
or 64 cents a share, a year earlier.
Analysts polled by Thomson Reuters had projected a profit of 89
cents a share and revenue of $2.5 billion.
Shares of Mosaic climbed almost 3% to $44.04 a share in
late-morning trade.
Angela Chen contributed to this article.
Write to Ilan Brat at ilan.brat@wsj.com
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