Mosaic Company The Reports Operating Results (10-Q)
Mosaic Co has a market cap of $24.51 billion; its shares were traded at around $55.72 with a P/E ratio of 12.9 and P/S ratio of 2.2. The dividend yield of Mosaic Co stocks is 1.7%. Mosaic Co had an annual average earning growth of 15.9% over the past 5 years.
Highlight of Business Operations:Net sales decreased 19% to $2.5 billion in the quarter ended August 31, 2012, compared to the prior year period. Net earnings attributable to Mosaic for the three months ended August 31, 2012 were $429.4 million, or $1.01 per diluted share, compared to $526.0 million, or $1.17 per diluted share, for the same period a year ago. The more significant factors affecting our results of operations and financial condition are listed below. Certain of these factors are discussed in more detail in the following sections of this Managements Discussion and Analysis of Financial Condition and Results of Operations.
The Phosphates segments net sales decreased to $1.6 billion for the three months ended August 31, 2012, compared to $2.2 billion in the first quarter of fiscal 2012. Lower sales volumes and lower sales prices resulted in decreased net sales of approximately $330 million and $140 million, respectively due to the factors discussed in the Overview.
Gross margin for the Phosphates segment decreased to $287.6 million from $409.6 million in the first quarter of fiscal 2012, primarily due to lower sales prices and sales volume. These factors had an unfavorable impact on gross margin of approximately $210 million, partially offset by lower costs of approximately $100 million. The decrease in costs was due primarily to lower raw material costs, primarily sulfur and ammonia, in our North America operations of approximately $50 million and lower raw material costs of approximately $40 million used in the production of our international products, including Blends. Other factors affecting gross margin and costs are discussed below. As a result of these factors, gross margin as a percentage of net sales was unchanged at 18% for the three months ended August 31, 2012 and August 31, 2011, respectively.
Gross margin for the Potash segment increased to $459.3 million for the three months ended August 31, 2012 from $444.4 million for the same period in the prior year. Gross margin was favorably impacted by approximately $50 million related to higher sales volumes in the current quarter. This was offset by approximately $50 million due to lower production rates, which resulted in a higher cost per tonne, and approximately $40 million in increased costs, primarily related to brine inflow management and depreciation.
Income tax expense was $163.3 million and the effective tax rate was 27.8% for the three months ended August 31, 2012. For the first quarter of fiscal 2012, we had income tax expense of $205.1 and effective tax rates of 28.1%. Our income tax rate is impacted by the mix of earnings across the jurisdictions in which we operate and by a benefit associated with depletion. Further information regarding our income taxes is included in Note 6 to the Condensed Consolidated Financial Statements in this report.
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