Mosaic (MOS) Up 50.3% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Mosaic (MOS). Shares have added about 50.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Mosaic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Mosaic’s Q4 Earnings Meet, Revenues Beat Estimates

Mosaic logged profits of $665 million or $1.76 per share in fourth-quarter 2021 compared with $828 million or $2.17 in the year-ago quarter.

Barring one-time items, adjusted earnings per share were $1.95, in-line with the Zacks Consensus Estimate.

Net sales rose roughly 56.3% year over year to $3,841 million in the quarter. The figure topped the Zacks Consensus Estimate of $3,810.6 million. Sales were driven by gains in all segments and higher year-over-year prices.

Segment Highlights

Net sales in the Phosphates segment rose roughly 48% year over year to around $1.5 billion in the reported quarter, driven by higher prices. Sales volumes in the segment declined 21.7% year over year in the quarter. The segment’s gross margin per ton improved to $254 from $73 in the year-ago quarter.

Potash division’s net sales climbed around 60% year over year to $897 million in 2021 driven by higher prices. Sales volumes in the segment fell 22.2% year over year in the quarter. Gross margin per ton in the quarter was $224, up around 397.7% year over year.

Net sales in the Mosaic Fertilizantes segment were around $1.5 billion in 2021, up around 87% year over year driven by higher year-over-year prices. Sales volume in the quarter remained constant year over year at 2.3 million tons. Gross margin per ton in the quarter was $95, up around 196.8% year over year.

FY21 Results

Earnings (as reported) for full-year 2021 were $4.27 per share compared with $1.75 per share a year ago. Net sales rose 42.3% year over year to around $12,357.4 million.

Financials

At the end of the quarter, Mosaic had cash and cash equivalents of $769.5 million, up around 34% year over year. Long-term debt fell roughly 17% year over year to $3,382 million.

Net cash provided by operating activities increased roughly 80.5% year over year to $430.4 million in the reported quarter.

Outlook

Moving ahead, the company noted that it expects strong agricultural commodity pricing trends to continue driving demand for fertilizers through 2022.

Phosphate demand is forecast to remain strong globally. China’s domestic phosphate industry is undergoing significant change as production is diverted from export markets toward domestic industrial and agricultural demand. For potash and phosphates, supply chain constraints and impacts related to the pandemic are hurting the global market, Mosaic noted.

The company forecasts total capital expenditures of $1.1 billion for full-year 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 11.56% due to these changes.

VGM Scores

At this time, Mosaic has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Mosaic has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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