Mosaic Profit Slips Less Than Expected, Buoyed by Cost Savings
February 11 2016 - 7:57AM
Dow Jones News
By Joshua Jamerson
Mosaic Co. (MOS) said Thursday its fourth-quarter earnings
fell--though less than Wall Street had expected--as lower costs
partially offset declines in its potash and phosphates
businesses.
Mosaic, one of the world's biggest fertilizer makers, said its
results were hurt by lower potash and phosphate prices and volumes,
as well as lower potash production.
The agriculture sector faces challenges for years to come, and
farmers have already been grappling with three straight years of
declining prices for major crops as supplies expand worldwide.
Mosaic last week said it would cut phosphate production amid
fertilizer prices that have been dented in part by sharp declines
in farm income.
The company had previously brushed off concerns that a steep
decline in prices for corn, soybeans and other crops in the last
two years would spur farmers to save money by curtailing their
fertilizer usage.
Potash sales slipped to $572 million in the quarter from $763
million last year. Phosphates sales were more stable, declining to
$1 billion from $1.2 billion a year ago.
Cash costs per tonne of production declined by 16% in 2015
compared to 2014, reflecting operation closures, lower spending and
a weaker Canadian dollar. Phosphate rock cash production costs were
at a five year low.
Over all, Mosaic posted a profit of $155 million, or 44 cents a
share, down from $360.7 million, or 97 cents a share, a year
earlier. Excluding items, such as foreign currency transaction,
earnings slipped to 53 cents a share from 87 cents a year ago.
Sales slipped 9.1% to $2.16 billion. Analysts polled by Thomson
Reuters had projected a profit of 44 cents a share and revenue of
$1.93 billion.
For 2016, total phosphates sales are expected to range from 1.8
million to 2.2 million tonnes for the first quarter, compared to
2.3 million tonnes in the same period last year. Sales in the
potash segment are expected to range from 1.5 million to 1.9
million tonnes in the current quarter, compared to 2.0 million
tonnes a year ago.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
February 11, 2016 07:42 ET (12:42 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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