Heavy fertilizer demand drives Mosaic's rapid profit growth

They must have sprinkled their own products on the accounting books: profits and sales were way, way, way up at Mosaic Co., the Plymouth-based fertilizer producer. Thank the commodity boom and the rising price of oil.

The company reported on Wednesday a six-fold increase in profits for the second quarter ended Nov. 30. Earnings per share rose 493 percent.

The global run on food and fuel has Mosaic profiting like never before, or at least like never in the company's three-year history, amid surging worldwide demand for agricultural fertilizers.

The boom has been driven by strong government support for renewable fuels in this country and by surging sales outside of the U.S., which account for two-thirds of company business.

American farmers produced the largest ever corn harvest last year to meet the demand for ethanol, and yet corn prices still rose. Soybeans and wheat trade at record prices as well.

Even with farmers preparing for larger crops, analysts say the prices should stay high as global demand rises.

"We're just not getting any indications that that's starting to slow yet," said Darin Newsom, an analyst with DTN.

The commodities wave pushed along companies like Mosaic last year, which saw its stock value rise 342 percent in 2007, the largest increase in national rankings of large-cap stocks. Mosaic was offered at $15 a share when it first went public in 2004. It closed at $89.01 Wednesday.

Wednesday's earnings call was more good news. Net earnings for the quarter were $394 million, or 89 cents a share, compared to $65.9 million, or 15 cents a share last year. Analysts had estimated earnings of an average 73 cents per share for the quarter.

Sales jumped 44 percent to $2.2 billion.

The company used some of its flush hand to pay down debt.

"Our unprecedented operating cash flows have allowed us to prepay $1 billion of long-term debt over an eight-month period and we are on track to deliver strong results in fiscal 2008 and beyond," said company CEO James T. Prokopanko, in a statement.