Mosaic Revenue Falls on Lower Fertilizer Prices; Shares Plunge

Mosaic’s revenue fell 14% to $2.382 billion in the third quarter from $2.753 billion in the year-ago quarter.
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Mosaic  (MOS) - Get Report shares plunged Tuesday after the fertilizer company reported that sales dropped in the third quarter owing to the coronavirus pandemic that has helped depress fertilizer prices.

The stock recently traded at $16.79, down 14.2%, and has slid 23% so far this year.

Mosaic’s revenue fell 14% to $2.382 billion in the third quarter from $2.753 billion in the year-ago quarter. The company posted a net loss of $6.2 million, or 2 cents per share, in the latest quarter, shrinking from a loss of $44.1 million, or 11 cents per share, last year.

Gross profits totaled $355 million in the latest quarter, up 27% from $280 million a year earlier. A 3% increase in finished goods sales volume and improved costs offset the impact of lower year-over-year prices in all three of Mosaic’s segments: fertilizantes, phosphates and potash.

"Mosaic's results for the third quarter continue to reflect the positive impact of our transformation work, which drove earnings growth despite year-over-year realized price declines," Mosaic CEO Joc O'Rourke said in a statement.

“Prices and demand for our products are recovering in 2020, positioning us to benefit from strong price realization in the fourth quarter in addition to our improved cost profile," O'Rourke added. "With improving grain and oil seed prices and limited inventories of fertilizer in all channels, we expect strong business conditions to continue into 2021."

Morningstar analyst Seth Goldstein offered mixed comments on Mosaic in August. “Mosaic will benefit from growing global demand for fertilizer,” he wrote. “However, because it sells commodity products, it has no pricing power and operates in a volatile industry.”