The Mosaic Company (NYSE:MOS) has issued an update on the company’s third-quarter business performance post Hurricane Irma.
The company witnessed good demand and strong operational performance prior to the hurricane with profitability metrics tracking ahead of the third quarter guidance. Post the mayhem of Irma, Mosaic now expects roughly 250,000 to 350,000 tons of lower production in September. In addition to this, the damage to Mosaic's Bartow warehouse is anticipated to result in a loss of up to 400,000 tons of finished phosphate product.
Mosaic’s shares have lost 6.1% over the past three months, underperforming the industry’s 21.8% gain.
Mosaic, in August, said that it expects phosphates sales volumes in the band of 2.2-2.5 million tons for the third quarter of 2017 compared with 2.5 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $310-$330 per ton. The segment gross margin rate is expected to be in the band of 7-9%.
Potash sales volumes have been forecast in the range of 1.9-2.2 million tons for the third quarter, compared with 2.2 million tons in the prior-year quarter. Average selling price, FOB plant, is expected in the band of $165-$180 per ton and the gross margin rate is anticipated to be in the band of 15-18%.
Mosaic is expected to benefit from its efforts to boost production capacity. The company is also anticipated to gain from improving global demand for fertilizers and cost-reduction measures.
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However, the company is exposed to a difficult pricing environment. Lower pricing is hurting sales and margins in its phosphate business and is expected to remain a headwind in the third quarter. Mosaic also faces a challenging operating environment in the agriculture space.
Mosaic Company (The) Price and Consensus
Mosaic presently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic material space are Koppers Holdings Inc. (NYSE:KOP) , Arkema S.A. (OTC:ARKAY) and Akzo Nobel N.V. (OTC:AKZOY) .
Koppers has expected long-term earnings growth of 18% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arkema has expected long-term earnings growth of 12.8% and carries a Zacks Rank #2 (Buy).
Akzo Nobel has expected long-term earnings growth of 11.1% and carries a Zacks Rank #2.
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Mosaic Company (The) (MOS): Free Stock Analysis Report
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