A lackluster farm economy has burdened Mosaic Co. for the past couple of years, but company officials said Tuesday that they see room for optimism in 2017.
The global fertilizer company based in Plymouth reported third-quarter 2016 net earnings of $39 million, down from $160 million in the third quarter of 2015.
President and Chief Executive Joc O'Rourke said global inventories have been drawn down, leading to more stable pricing. "Both potash and phosphate prices strengthened in the quarter as pent-up demand materialized," he said. Those minerals are mined and processed into crop nutrients.
O'Rourke said that "fertilizer fundamentals are improving, albeit slowly," and warned that the current quarter will exhibit a "normal seasonal slowdown." But he expects the market to pick up considerably next year.
Third-quarter earnings per diluted share were 11 cents — 1 cent higher than analysts expected — compared with 45 cents per share a year earlier.
Mosaic's net sales in the third quarter of 2016 were $2 billion, down from $2.1 billion during the same period last year. Operating earnings during the quarter were $70 million, down from $246 million a year ago. Officials said the lower earnings were driven primarily by lower potash prices and lower phosphate margins, and were offset partly by higher sales volumes and positive impacts of company cost savings.
For example, the average price of $160 per ton of potash in the third quarter compared with $265 per ton a year ago. But the company sold 2.2 million tons in this year's third quarter compared with 1.6 million tons in third quarter 2015. Excessive supplies, weak currencies and low commodity prices have all kept fertilizer prices in the basement in recent months.
Mosaic announced two weeks ago that shareholders would receive a quarterly dividend of 27.5 cents per share on Dec. 15, but the company said there are no assurances that its board will declare future dividends.
