Mosaic posts wider-than-expected third-quarter loss on sulfur and raw material costs

Mosaic reported a wider-than-expected third-quarter adjusted loss of $0.19 a share, missing analyst expectations by 17 cents, as higher raw material costs and lower sales volumes weighed on profitability. Revenue fell 10.1% from a year earlier to $3.1 billion but beat consensus by $50 million.

The company posted a net loss of $72.1 million, or $0.23 a share, compared with net income of $411.4 million a year earlier. Adjusted EBITDA fell to $324 million from $806 million.

Phosphate recorded an operating loss of $194 million, against operating earnings of $102 million a year earlier. Sales volumes fell to 1.4 million metric tons from 1.6 million, even as average diammonium phosphate prices rose to $838 a metric ton from $714.

Potash remained profitable, with operating earnings of $189 million, down from $229 million. Production problems at the Esterhazy mine in Canada led Mosaic to lower its full-year potash forecast to 8.6 million metric tons.

CEO Bruce Bodine said the company “aligned phosphate production with the availability of affordable sulfur.” Mosaic secured a fourth-quarter sulfur contract at $615 a long ton, below the third-quarter average of $715, but higher-cost material bought earlier will keep weighing on fourth-quarter earnings.

Soaring sulfur costs are a big reason why Mosaic kept its phosphate plants curtailed as the quarter wound down.

Source: Seeking Alpha via TradingView