The Mosaic Company MOS recently announced that its Brazil-based business, Mosaic Fertilizantes, has resumed operations at its Araxa and Tapira mines at full capacity. The move highlights the end of the regulatory requirement for idling of the company’s tailings dams.
Per the company, strong execution across its business has enabled it to resume operations ahead of schedule. The resumption will position Mosaic to address farmers’ demand heading into Brazil’s key planting season.
Moreover, the revised regulatory requirements are expected to make mining safer for employees, communities as well as the environment. Mosaic’s Catalao mine has resumed operations in June, which was idled due to the regulatory changes.
Shares of Mosaic have lost 35.5% in the past year compared with the industry’s 14.7% decline.
In August, Mosaic updated its outlook for 2019. The company expects that the potential for record North American fertilizer application volumes as well as strong demand in Brazil will drive demand globally during the second half of 2019.
It expects adjusted EBITDA for 2019 in the band of $1.8-$2 billion, down from its earlier view of $2-$2.3 billion. It also projects adjusted earnings per share in the range of $1.10-$1.50 compared with the prior guidance of $1.50-$2.00.
For the third quarter, Mosaic 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 for the third quarter. It projects gross margin for the segment in the range of $30-$40 per ton.
Zacks Rank & Key Picks
Mosaic currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Alamos Gold Inc. AGI and Arconic Inc. ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinross has an expected earnings growth rate of 160% for 2019. The company’s shares have surged 79.5% in the past year.
Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 60.5% in a year’s time.
Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 18.6% in the past year.
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