Fertilizer maker Mosaic (MOS) said that it envisions margins for its phosphates and potash businesses to come ahead of its earlier projected guidance ranges. Moreover, phosphates volumes are also expected to exceed its previous expectations while volumes for potash have been forecast to be at the top end of the company’s guidance range.
Based on these expectations, the Minnesota-based company expects reported earnings for the fourth quarter of 2014 to be in the band of 93 cents to 98 cents per share. Barring special items including tax benefits mainly associated with the company’s takeover of a Brazilian distribution business, earnings are expected to be in the range of 83 cents to 88 cents per share for the quarter. The guidance tops the current Zacks Consensus Estimate of 59 cents.
Mosaic added that it saw higher-than-expected demand for both potash and phosphates during the fourth quarter. The company said that its phosphates business sold 3.3 million tons of finished products during the quarter, also ahead of its expectations of 2.5 million-2.8 million tons. Its potash business also produced at a higher operating rate in the quarter.
Mosaic sees demand for potash and phosphates to remain strong this year. It expects normal seasonal spring demand in first-quarter 2015. The company will unveil its guidance for the first quarter and full-year 2015 during its fourth-quarter 2014 earnings release on Feb 11.
Mosaic should benefit from its efforts to boost production capacity and acquisitions. However, the company like other fertilizer makers such as Agrium (AGU), Potash Corp. (POT) and CF Industries (CF), remains exposed to a weak pricing environment.
Mosaic is also facing a challenging business environment in agriculture. Agricultural commodity prices remain weak.
Mosaic is a Zacks Rank #4 (Sell) stock.
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