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Mosaic (MOS) 2Q Oper Earnings Fall 30 Pct As Sales, Margins Drop

 January 04, 2013 07:28 AM

(By Balachander) Mosaic Co. (NYSE: MOS) posted a drop in quarterly operating earnings as lower phosphate volumes and margins resulted in a 17 percent decline in sales.

Operating earnings fell nearly 30 percent to $560 million. Normalized earnings per share attributable to Mosaic were 99 cents for the second quarter.

International shipments were impacted by prolonged contract negotiations in India and China, CEO Jim Prokopanko said.

Gross margin as percentage of net sales shrank to 27 percent from 29 percent a year ago.

Net sales declined 17 percent to $2.5 billion due to lower phosphate and potash volumes and a fall in phosphate prices. Sales at the company's phosphates and potash segments declined 19 percent and 7 percent, respectively.

[Related -Why We Like International Business Machines Corp. (IBM), The Coca-Cola Company (KO) And Mosaic Co (MOS)]

Earnings were $629 million or $1.47 per share for the second quarter, up from $624 million or $1.40 per share in the comparable period of last year. Results for the three months ended Nov. 30, 2012, included a $179 million, or 42 cents a share, benefit from a decrease in the amount of unrecognized tax benefits reported on the balance sheet.

For the third quarter, the company expects Phosphates segment gross margin to be flat with the second quarter.

In the preceding first quarter, MOS earned $1.01 a share on sales of $2.5 billion.

The stock, which has been trading between $44.43 and $61.98 over the past year, closed Thursday's regular trading at $56.77.

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