Last month, Mosaic laid off 46 unionized workers, or 8% of the workforce, at its Colonsay potash mine, in Saskatchewan, Canada. (Image by Pictureguy | Shutterstock.com)
U.S. fertilizer company Mosaic (NYSE:MOS) logged Tuesday a better-than-expected quarterly profit, thanks to lower costs and a smaller tax bill.
Excluding one-time items, Mosaic earned 62 cents per share in the third quarter ended Sept. 30, above the average analyst estimate of 53 cents.
“Cost reduction efforts…in combination with our share repurchases and a lower effective tax rate, drove an improvement in adjusted earnings per share,” Chief Financial Officer Rich Mack said in a statement.
Investors reacted positively to the news. The stock was trading 3.34% higher to $35.68 in New York at 10:30 am ET, but has fallen over 22% so far this year.
Net earnings, however, dropped nearly 21% to $160 million, or 45 cents per share, hurt by lower sales of potash and phosphates, as well as a strong dollar.
Sales also slipped 6.5% in the latest quarter as demand declined. Sales volumes for phosphates, a key product, were of 2.1 million metric tons, at the tail end of Mosaic guidance of 2.1 million metric tons to 2.4 million metric tons. The average selling price was $451 a metric ton, near the high end of the company forecast of $435 to $455.
Net sales in the phosphates segment were $1 billion for the third quarter, down from $1.1 billion a year earlier as a result of both lower sales volumes and lower realized prices, the company said.
The Plymouth, Minnesota-based firm also posted sales volumes of potash of 1.6 million metric tons, at the low end of its guidance, with an average selling price of $265 a metric ton. Net sales in the potash segment totalled $492 million for the third quarter, down from $593 million last year.
In September, the company cut its third-quarter production outlook and extended maintenance downtime at its Colonsay mine in Canada amid softer demand, mostly due to delayed fertilizer purchases in Brazil and North America.
Last week, Canada’s Potash Corp. (TSX, NYSE:POT), the world’s biggest fertilizer producer by market value slashed outlook and production amid tough market conditions.
