Mosaic Co., North America's second-largest fertilizer maker, posted an 89 percent decline in fiscal third-quarter profit as farmers delayed purchases of phosphate and potash crop nutrients.
Net income fell to $58.8 million, or 13 cents a share, in the three months through February, from $520.8 million, or $1.17, a year earlier, Plymouth-based Mosaic said Tuesday. Excluding some one-time items, profit was 18 cents a share, trailing the 22-cent average estimate of nine analysts surveyed by Bloomberg.
Chief Executive James Prokopanko has curtailed output of potash and phosphate crop nutrients as farmers bought less after wheat, corn and soybean prices tumbled last year from record highs. Meantime, a stalemate between growers and crop-nutrient dealers over pricing has left storage and distribution channels clogged. Sales in the quarter declined 36 percent to $1.38 billion.
"Expectations are that it's going to take time to clear the system to allow producers like Mosaic to refill the channels," Ben Johnson, an analyst at Morningstar Inc. in Chicago, said before the results were released. "This won't be remembered as a stellar quarter."
Prokopanko said he expects Mosaic's financial results to improve in its fiscal fourth quarter, though they will be weak compared with a year earlier.
"We remain confident that long-term agricultural fundamentals are excellent," Prokopanko, 55, said in a prepared statement. "This is a self-correcting cycle because demand for crop nutrients can only be deferred for so long."
U.S. farmers are expected to plant 1.2 percent fewer acres of corn, the most fertilizer-intensive crop, this year, the U.S. Department of Agriculture said March 31. High input costs are spurring farmers to plant more soybeans, a crop that is less expensive to grow, analysts said.
Mosaic shares fell $1.71, or 4 percent, to $41.23 in after-hours trading. The shares had fallen 24 percent this year before the earnings report.
