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The Mosaic Company Reports Strong Fiscal Year 2010 Fourth Quarter Earnings Growth
July 22, 2010 4:21 PM ET
PLYMOUTH, Minn., July 22, 2010 /PRNewswire via COMTEX/ —
The Mosaic Company (NYSE: MOS) announced today net earnings of $396.1 million, or $0.89 per diluted share, for the fourth quarter ended May 31, 2010. These results compare with net earnings of $146.9 million, or $0.33 per diluted share, for the fourth quarter ended May 31, 2009.
KEY ITEMS
Total phosphate sales volumes were 2.3 million tonnes and the average diammonium phosphate (DAP) selling pricewas $438 per tonne Potash sales volumes rebounded from 0.6 million tonnes a year ago to 1.8 million tonnes and the average muriate of potash (MOP) selling price was $336 per tonne
Gross margin as a percent of net sales improved to 37 percent, compared to 13 percent in the prior year. Foreign currency transaction losses were $0.6 million versus losses of $297.9 million, or $0.42 per share last year Income tax expense was $138.8 million compared to a benefit of $330.3 million a year ago Cash flow from operating activities was $532.1 million for the fourth quarter of fiscal 2010 an improvement of $226.3 million from the prior year
The Company maintained a strong financial position with cash and cash equivalents of $2.5 billion as of May 31, 2010 A recently issued permit for an extension of Mosaic’s South Fort Meade phosphate rock mine is being challenged in Federal court. If a preliminary injunction requested by the plaintiffs is granted, the Company’s phosphate operations could be impacted Mosaic had net sales in the fourth quarter of fiscal 2010 of $1.9 billion, an increase from $1.6 billion, or 17 percent, compared to the same period last year. Mosaic’s gross margin for the fourth quarter of fiscal 2010 was $687.6 million, or 37 percent of net sales, compared with $204.1 million, or 13 percent of net sales, a year ago. Fourth quarter operating earnings were $547.6 million, an improvement of $421.3 million over the prior year. The increases in gross margin and operating earnings were primarily due to improved phosphates selling prices, lower sulfur costs and increased potash sales volumes, partially offset by lower potash selling prices. “We are pleased with our strong fourth quarter results,” said Jim Prokopanko, Mosaic’s President, and Chief Executive Officer. “Crop nutrient application rates and shipments have snapped back from last year’s levels and a strong recovery in both the phosphates and potash markets is underway.”
Phosphates
Net sales in the Phosphates segment were $1.2 billion for the fourth quarter, comparable to the prior year. Phosphates’ fourth quarter gross margin was $306.6 million, or 26 percent of net sales, compared with a loss of $31.9 million for the same period a year ago. Operating earnings were $221.1 million, an increase of $300.3 million over the fourth quarter of fiscal 2009, primarily due to higher selling prices and lower sulfur costs. In addition, fiscal 2009 fourth quarter results included a $61.4 million inventory lower of cost or market write-down. The average fourth quarter DAP selling price, FOB plant, was $438 per tonne, compared to $365 a year ago and $336 in the
third quarter of fiscal 2010. Phosphates segment total sales volumes were 2.3 million tonnes, compared to 2.5 million tons a year ago. Declines in International and Blend crop nutrient volumes from the year-ago quarter were partially offset by an increase in North American crop nutrient demand. Mosaic’s North American phosphate production was 1.9 million tonnes compared with 2.0 million tons a year ago.