Yahoo Finance Mosaic (MOS) Down 17.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Mosaic (MOS). Shares have lost about 17.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Mosaic due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Mosaic's Q1 Earnings Miss Estimates, Revenues Beat
Mosaic reported first-quarter 2023 profit amounting to $434.8 million or $1.28 per share, down from $1,182 million or $3.19 per share in the prior-year quarter.
The company’s adjusted earnings amounted to $1.14, down 52.7% year over year from $2.41 per share. It lagged the Zacks Consensus Estimate of $1.28.
Net sales declined roughly 8.1% year over year to $3,604.3 million in the quarter. It surpassed the Zacks Consensus Estimate of $3,336.5 million.
Segmental Highlights
Net sales in the Potash segment were around $907 million in the quarter, down from $1.1 billion a year ago. Sales volumes in the segment were 1.9 million tons, up from 1.8 million tons in the prior-year period. The segment’s gross margin per ton decreased to $216 from $323 in the year-ago quarter.
The Phosphate division’s net sales were down to $1.4 billion in the first quarter from $1.5 billion in the prior-year period. Sales volumes in the segment rose around 5.9% in the quarter to 1.8 million tons. Gross margin per ton in the quarter was $141, down from $318 in the year-ago quarter.
Net sales in the Mosaic Fertilizantes segment were around $1.3 billion, down from $1.5 billion in the year-ago quarter. Sales volume in the quarter rose 16.7% to 2.1 million tons.
Financials
At the end of quarter, Mosaic had cash and cash equivalents of $464.8 million, down around 47.3% year over year. Long-term debt declined around 28.7% year over year to $2,408.9 million.
Net cash provided by operating activities was $149 million in the reported quarter, down from $506.2 million in the prior-year period.
Mosaic returned $608 million to shareholders during the first quarter of 2023 through share repurchase and dividends.
Outlook
Through 2023 and potentially beyond, grain and oilseed markets are anticipated to remain constrained. In addition to decreased fertilization and unfavorable weather in major growing regions, including the Americas, Europe, and China, the war's interruption of Ukraine's agricultural productivity poses a threat to world agricultural production, Mosaic noted. Therefore, the pressure on global stocks-to-use ratios, which are already expected to be near 25-year lows, is likely to persist.
A return to regular nutrient applications is expected to be supported by historically high crop prices and fertilizer prices that have retreated after the post-Ukraine invasion rise. From the second half of 2022, sentiment in North America has significantly improved, and spring nutrient application rates are trending toward normal levels. A favorable fertilizer-to-soybean barter ratio in Brazil points to a sizable recovery in fertilizer shipments in 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -30.77% due to these changes.
VGM Scores
At this time, Mosaic has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Mosaic has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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The Mosaic Company (MOS) : Free Stock Analysis Report
