Mosaic Doubles Dividend as Profit Tops Estimates on Planting
Mosaic Co., the second most valuable North American fertilizer producer, doubled its dividend and posted fourth-quarter earnings and revenue that beat analysts' estimates after an extended spring season.
Mosaic will raise its quarterly payout to 25 cents a share from 12.5 cents, the Plymouth, Minnesota-based company said today in a statement. Profit in the three months through May 31 excluding plant-closing costs, losses on derivatives and other items was $1.27 a share, topping the $1.15 average of 16 estimates compiled by Bloomberg. Sales fell 1.4 percent to $2.82 billion, beating the $2.56 billion average of 11 estimates.
North American farmers had more time in the spring to apply crop nutrients, helping Mosaic to sell more phosphate products than it had forecast in April. The company also reported a 13 percent increase in its average selling price for potash, and said demand is still “strong” for its products in Central and South America.
“Despite the current drought in the U.S. corn belt, farm economics remain compelling, and farmers around the world continue to be incented to use our products,” Chief Executive Jim Prokopanko said in the statement. “We anticipate another good year in fiscal 2013.”
Mosaic rose 3.5 percent to $57.33 at 10:33 a.m. in New York. The shares have increased 14 percent this year.
Eoin Treacy's view As prospects for corn, soybean and wheat yields decline, farmers will naturally
attempt to plant more next year in the hope of recouping costs incurred by this
year's harvest. When I last reviewed crop nutrient companies on July
5th a considerable number were approaching their respective 200-day MAs.
Since then most have pushed through their trend means to break medium-term progressions
of lower rally highs and clear downward dynamics would be required to check
Potash Corp of Saskatchewan (0.92%), Mosaic (1.71%), Intrepid Potash and K+S (3.37%) all share this pattern. UralKali (2.94%) has rallied to challenge the progression of lower highs over the last five weeks and a sustained move below the 200-day MA would now be required to question medium-term scope for additional upside. Incitec Pivot is a now a notable underperformer. It encountered resistance in the region of the 200-day MA two weeks ago and will need to sustain a move above it to begin to question the consistency of the medium-term downtrend.
While somewhat overbought in the short-term, Agrium (0.79%) is currently testing its 2011 highs and a sustained move below the 200-day MA would be required to question medium-term scope for additional upside. Yara International (2.5%) has a similar pattern. CF Industries (0.78%) hit a new all-time high this week,
Among the high yielding crop nutrient related MLPs CVR Partners (8.48%) and Terra Nitrogen (7.19%) found support in May following sharp pullbacks. They have held progressions of rising reaction lows since and these would need to be broken to question potential for continued higher to lateral ranging.