The Mosaic Company (MOS) Tops Q1 EPS by 2c

The Mosaic Company (NYSE: MOS) reported Q1 EPS of ($0.06), $0.02 better than the analyst estimate of ($0.08). Revenue for the quarter came in at $1.8 billion versus the consensus estimate of $1.65 billion.

2020 Market Outlook and Key Assumptions

Brazilian growers are benefiting significantly from the weak Brazilian currency, with fertilizer demand on path to set another shipment record. In North America, fertilizers applications are in the peak spring season, and demand is running high. Mosaic’s retail distribution customers are reporting that demand is out-pacing even their high expectations.

Our April shipment volumes were robust, and North American prices through April have responded positively. We are seeing phosphate cargos that will arrive in May, too late for spring application, pressuring price quotes for May delivery. We believe this dislocation is temporary, and market conditions remain good overall. The impact of COVID-19 in North America has pushed Mosaic’s customers to try to accelerate deliveries where possible, but otherwise the season is playing out like many other normal springs.

In the back half of 2020 there is risk to global shipment volumes if the negative impact of COVID-19 on biofuel and related crop prices continues. Farmers are receiving substantial governmental support globally, which could mitigate the potential negative impact on fertilizer demand.

The Company provides the following modeling assumptions for the full year 2020:

Estimated reconciling items EBITDA(1) to EPS Full Year

2020 Depreciation, Depletion & Amortization $910 - $920 million

Net Interest Expense $180 - $190 million

Non-notable adjustments $80 - $90 million

Effective tax rate* Mid to High 30’s %

Capital expenditures ~ $1.2 billion

For earnings history and earnings-related data on The Mosaic Company (MOS) click here.

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