Mosaic Company's quarterly profits dropped 4 percent over a year ago, as the big fertilizer maker faced falling prices for both its potash and phosphate-based products. And those depressed prices don't appear to be receding soon.
In fact, the company said Tuesday it will cut back potash production somewhat. With the murky near-term outlook, Mosaic's stock fell $2.01, or 3.6 percent, closing at $54.12.
Plymouth-based Mosaic, one of the world's largest fertilizer makers, Tuesday posted fiscal fourth-quarter earnings of $486 million or $1.14 per share, down from $507 billion or $1.19 a year earlier. Mosaic's profits were in line with the average forecast of analysts polled by Thomson Reuters.
Mosaic's sales of $2.7 billion also squared with analysts' forecasts, but were down from $2.8 billion a year earlier.
Mosaic runs large mines, particularly in Saskatchewan and Florida, that respectively extract potash and phosphate and process it into potassium-based and phosphorus-based fertilizer. Potash fertilizer prices were down 19 percent during the quarter over a year ago; phosphate prices fell 2 percent.
Mosaic CEO Jim Prokopanko said he expects the current price weakness to moderate over time as demand growth absorbs additional supply. Still, "we do not expect a significant recovery in potash and phosphate prices in the near term," Prokopanko told stock analysts in a conference call.
Analysts expected declining prices during the quarter, but perhaps not as negative an outlook.
"It's a little more than some were looking for," said Ken Perkins, a stock analyst at Morningstar Inc.
