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Mosaic (MOS) To Report Q2 Earnings: What's In The Cards?

By Zacks Investment ResearchStock MarketsJul 27, 2017 09:29PM ET
www.investing.com/analysis/situacion-del-dolar-y-del-peso-200204200
Mosaic (MOS) To Report Q2 Earnings: What's In The Cards?
By Zacks Investment Research   |  Jul 27, 2017 09:29PM ET
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The Mosaic Company (NYSE:MOS) is set to release second-quarter 2017 results before the opening bell on Aug 1.
Mosaic reported break-even results on a per share basis in first-quarter 2017 against net earnings of 73 cents per share recorded a year ago. Earnings, barring one-time items, were 4 cents per share that missed the Zacks Consensus Estimate of 19 cents.
The company’s revenues fell roughly 5.7% year over year to $1,578 million in the reported quarter, missing the Zacks Consensus Estimate of $1,672 million.
Mosaic beat earnings estimates in two of the trailing four quarters while missing in the other two, with an average beat of 42.8%.
Let's see how things are shaping up prior to this announcement.
Mosaic Company (The) Price and EPS Surprise
Mosaic expects higher realized prices of phosphate and potash in the second quarter, which are likely to improve the company’s earnings.
The company anticipates phosphates sales volumes in the band of 2–2.3 million tons for second-quarter 2017 compared with 2.4 million tons for the same quarter in 2016. Average selling price, FOB plant, is expected to be in the range of $320–$340 per ton. The segment gross margin rate is expected to be around 10%.
Potash sales volumes have been forecast in the range of 2–2.3 million tons for the second quarter, compared with 2 million tons in the prior-year quarter. Average selling price, FOB plant, is expected in the band of $170 to $185 per ton and the gross margin rate is anticipated to be roughly in the low 20% range.
Total sales volumes for the International Distribution segment are expected to range from 1.4 million–1.7 million tons for second-quarter 2017, compared with 1.4 million tons in the prior-year quarter. The segment gross margin is estimated to be around $20 per ton.
Mosaic is gaining from its cost-reduction measures. The company is also likely to benefit from its efforts to boost production capacity and acquisitions. Moreover, the company is expected to gain from improving global demand for fertilizers. Mosaic sees a more stable operating environment in 2017 and envisions higher demand for both phosphate and potash.
However, Mosaic faces a challenging operating environment in the agriculture space. The company is also exposed to a difficult pricing environment which may continue to weigh on its margins.
Mosaic has underperformed the industry over the last three months. The company’s shares have declined around 11.1% over this period, compared with roughly 2.8% gain recorded by the industry.
Earnings Whispers
Our proven model does not conclusively show that Mosaic is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Mosaic is currently -4.00% This is because the Most Accurate estimate is 24 cents while the Zacks Consensus Estimate is pegged at 25 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Mosaic’s Zacks Rank #3 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.
Note that Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
The Chemours Company (NYSE:CC) has an Earnings ESP of +4.44% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Westlake Chemical Corporation (NYSE:WLK) has an Earnings ESP of +5.04% and a Zacks Rank #2.
Endeavour Silver Corp. (NYSE:EXK) has an Earnings ESP of +100% and a Zacks Rank #3.
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Chemours Company (The) (CC): Free Stock Analysis Report

Westlake Chemical Corporation (WLK): Free Stock Analysis Report

Mosaic Company (The) (MOS): Free Stock Analysis Report

Endeavour Silver Corporation (EXK): Free Stock Analysis Report

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Zacks Investment Research
Mosaic (MOS) To Report Q2 Earnings: What's In The Cards?
 

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Mosaic (MOS) To Report Q2 Earnings: What's In The Cards?

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