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Mosaic (MOS) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research

The Mosaic Company MOS is set to release third-quarter 2019 results after the closing bell on Nov 4. The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 2.8%.

Mosaic’s shares declined 29.4% year to date compared with the industry’s 4.6% fall.



What to Expect in Q3

In August, Mosaic provided guidance for third-quarter 2019.

The company expects phosphates sales volumes in the band of 2.2-2.4 million tons. The segment’s adjusted gross margin is projected in the band of $5-$15 per ton.

Potash sales volumes have been forecast in the range of 2.2-2.4 million tons for the third quarter and adjusted gross margin is projected in the band of $60-$70 per ton.

The company also expects sales volumes in the Mosaic Fertilizantes segment in the band of 3.6-3.8 million tons. It projects gross margin for the segment in the range of $30-$40 per ton.

Moreover, Mosaic stated that the volume and product mix that affected second-quarter gross margin were transitory and are expected to not have made an impact on third-quarter performance. It expects around $12 per ton improvement in raw material cost in the third quarter relative to the second quarter.

Also, the company expects to realize significant cash savings from the idling of the Colonsay facility, of which only a small portion is likely to have contributed to Mosaic's third-quarter earnings.  

What do the Estimates Indicate

The Zacks Consensus Estimate for Mosaic’s third-quarter consolidated sales is currently pegged at $2,576 million, which suggests a fall of 12.1% from the year-ago quarter’s tally.

For the third quarter, the Zacks Consensus Estimate for total sales in the Phosphates segment is currently pegged at $924 million that indicates a decline of 11.2% year over year.

The Zacks Consensus Estimate for total sales in the Potash segment is currently pegged at $601 million, which calls for an expected decline of 1.3% year over year.

The consensus mark for sales in the Mosaic Fertilizantes segment is currently pegged at $1,244 million, which indicates an expected decline of 11.1% year over year.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Mosaic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Mosaic is -8.09%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 25 cents and 27 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Mosaic currently carries a Zacks Rank #5 (Strong Sell).

The Mosaic Company Price and EPS Surprise

 

The Mosaic Company Price and EPS Surprise
The Mosaic Company Price and EPS Surprise

The Mosaic Company price-eps-surprise | The Mosaic Company Quote

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Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Franco-Nevada Corporation FNV has an Earnings ESP of +0.34% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross Gold Corporation KGC has an Earnings ESP of +2.50% and flaunts a Zacks Rank #1.

Sandstorm Gold Ltd. SAND has an Earnings ESP of +12.50% and sports a Zacks Rank #1.

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The Mosaic Company (MOS) : Free Stock Analysis Report
 
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
 
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
 
Sandstorm Gold Ltd (SAND) : Free Stock Analysis Report
 
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