NEW YORK ( TheStreet) -- Fertilizer stocks were rising sharply again this week, helped by a strong earnings report from Mosaic ( MOS), the big crop-nutrient company spun out from Cargill several years ago.

Mosaic, which released results after the close on Tuesday, posted net income of $1 billion, or $2.29 a share, for the quarter ended in November. The sum includes a big one-time gain from the sale of the company's stake in a South American fertilizer outfit.

Excluding the gain, Mosaic had an adjusted profit of $1.28 a share, which still sailed past Wall Street estimates of 91 cents a share for the quarter. That's much better than year ago. In the same period of 2009, Mosaic earned $108 million, or 24 cents a share. Revenue jumped as well. The company reported a top line of $2.7 billion, up 56% from a year ago.

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Investors appeared to love the report, even though it simply confirmed what the world has known since last fall: Soaring crop prices have persuaded farmers to plow their profits back into an aggressive effort to juice their yields in 2011. That means they've bought a lot of fertilizer.

Not surprisingly, Mosaic's top executives were full of bullish remarks: "Demand for fertilizers is booming," CEO Jim Prokopanko told Bloomberg. "We're doing all we can to keep up with demand."

But that doesn't mean there aren't concerns. For one thing, some investors believe that the commodities boom of late 2010 has driven fertilizer stocks so high so fast that putting money into these names at this point is the height of risky, especially since a bumper harvest in 2011 in North America would likely crunch share prices across the agricultural spectrum.

Others point out that Mosaic's environmental troubles in Florida has cast a cloud over the stock. The company's prospects this year and beyond may very well depend on environmental litigation surrounding its phosphate mining operations in the state. Activists including the Sierra Club have effectively blocked Mosaic from running the mine, called South Fort Meade, at full capacity. Given the price trends for fertilizers, Mosaic would very much like to run the mine at full capacity.

The court battle could be resolved within a few months; some analysts say Mosaic will win; others aren't so sure. Unsurprisingly, the company itself expresses confidence. "Our South Fort Meade mine is one of the most cost effective and efficient operations in the world and we fully expect that we will be able to mine the ample resources located at South Fort Meade in the years ahead," Mosaic chief Prokopanko told investors in the earnings conference call Wednesday.

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