Mosaic Co. profit quadruples in quarter Last update: July 28, 2008 - 11:50 PM
Mosaic Company's fiscal fourth-quarter net income more than quadrupled as the Plymouth company said global fertilizer demand is growing twice as fast as it has, on average, over the last decade.
Mosaic and other fertilizer makers have benefited heavily from the commodity boom as farmers try to squeeze more and more corn out of their land. The company said that stocks of grain and oil-seeds still are low -- implying further growth is needed to keep up with demand.
The fertilizer maker reported net income of $862.5 million, or $1.93 a share, compared with $202.6 million, or 46 cents a share, a year earlier. Revenue more than doubled to $3.47 billion.
The average per-share earnings estimate of analysts polled by Thomson Reuters was $1.64 on revenue of $2.85 billion.
In after-hours trading Monday, Mosaic's shares sank 3.6 percent to $118.19 from their closing price of $122.60.
Mosaic's gross margin widened to 37.1 percent from 27.1 percent. Phosphate net sales more than doubled, matching the rise in phosphate prices, while potash revenue rose 74 percent.
Mosaic said fertilizer demand is growing at a compound annual rate of 4.2 percent, compared with 1.7 percent annual growth between 1995 and 2005.
Investors, however, have begun to worry that the run-up in prices will lead to an all-but-inevitable dip in the cycle. Mosaic's shares are off 25 percent from their June peak of $163.25. Some traders have grown wary, saying that fertilizer stocks are beginning to look like tech stocks at the end of the 1990s or home-builder stocks earlier this decade.
