Mosaic Co (NYSE:MOS) reduces its 3Q sales forecast


Dallas, Texas 09/30/2013 (Financialstrend) – The Mosaic Co (NYSE:MOS) is North America’s largest fertilizer producer. On September 26, the company announced that it is lowering its forecast for both its potash and phosphate business. Analysts opine that these downgrading of expectations from the potash producer is in line with the prevailing unsettled market dynamics and a delayed harvest in its primary market of North America.

Prevailing fertilizer market uncertainty

The market dynamics are fluid at this stage due to the slowing down of the agricultural economies of the import dependent Chinese, Indian and south east Asian markets. This has resulted in slower sales for Mosaic in particular and the fertilizer industry in general. Trade data for August indicate a drop of      7% in North American potash sales and a 16% dip in exports out of North America.

MOS drops forecast

This prevailing weak demand was the primary reason behind the fertilizer company dropping its 3Q13 potash sales forecast by 20% to 1.45 million tons. In a similar 10% down grading of forecast for its phosphate sales, the company expects a sales volume of 2.6 million tons. The company has also hedged for a further drop in potash price as key markets continue to suspend purchase for lack of clarity on the pricing front globally.

Challenging phase pushes stock down

This challenging outlook for the company in general has driven MOS stock into negative territory. It stock has lost close to 3% value over previous week’s trading and a substantive 18% loss in value over the past 90 days. The stock has shed close to 23% of its value over the past 9 months. It has a market capitalization of $18.5 billion with net sales over the past 12 months trailing period being $9.97 billion.  The company in the interim has managed to pay a $1 dividend per share and has a 2.4% dividend yield over the past year.