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Mosaic Company The Reports Operating Results (10-Q)

January 04, 2013 | About:

10qk

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Mosaic Company The (MOS) filed Quarterly Report for the period ended 2012-11-30.

Mosaic Co has a market cap of $24.48 billion; its shares were traded at around $58.25 with a P/E ratio of 12.4 and P/S ratio of 2.1. The dividend yield of Mosaic Co stocks is 1.9%. Mosaic Co had an annual average earning growth of 14.5% over the past 10 years.

Highlight of Business Operations:

Net sales decreased 16% to $2.5 billion in the quarter ended November 30, 2012, compared to the prior year period. Net earnings attributable to Mosaic for the three months ended November 30, 2012 were $628.8 million, or $1.47 per diluted share, compared to $623.6 million, or $1.40 per diluted share, for the same period a year ago. Included in fiscal 2013 net earnings is a discrete income tax benefit of approximately $180 million, or $0.42 per diluted share, related to the resolution of certain tax matters and overall lower effective tax rate. Other 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.

Net earnings attributable to Mosaic for the six months ended November 30, 2012 were $1.1 billion, or $2.48 per diluted share, compared to $1.1 billion, or $2.58 per diluted share, for the same period a year ago. Included in net earnings is a discrete income tax benefit of approximately $180 million or $0.42 per diluted share, related to the resolution of certain tax matters. Results for the six months ended November 30, 2012 and 2011 primarily reflected the factors discussed above for the three months ended November 30, 2012 and 2011. 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.

Gross margin for the Phosphates segment decreased to $317.5 million from $475.7 million in the second quarter of fiscal 2012, primarily due to lower sales prices and sales volume. These factors had an unfavorable impact on gross margin of approximately $200 million, partially offset by lower product costs of approximately $60 million. The decrease in costs was due primarily to lower raw material costs, primarily sulfur and ammonia, in our North America operations of approximately $25 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 decreased to 18% for the three months ended November 30, 2012 from 22% for the three months ended November 30, 2011.

Gross margin for the Phosphates segment decreased to $605.1 million for the six months ended November 30, 2012 from $885.3 million in the same period a year ago, primarily due to lower sales prices and sales volume. These factors had an unfavorable impact on gross margin of approximately $460 million, partially offset by lower product costs of approximately $180 million. The lower costs were primarily due to lower raw material costs in our North American operations, primarily sulfur and ammonia, of approximately $105 million and lower raw materials costs of approximately $115 million used in the production of our international products, including Blends. Lower raw material costs were partially offset by higher finished goods production costs of approximately $40 million. Factors affecting gross margin and costs are further discussed below. As a result of these factors, gross margin as a percentage of net sales decreased to 18% for the six months ended November 30, 2012 compared to 20% in the same period a year ago.

Income tax (benefit) expense was ($78.1) million and $85.2 million and effective tax rates were (14.3%) and 7.5% for the three and six months ended November 30, 2012, respectively. For the three and six months ended November 30, 2011, we had income tax expense of $230.7 million and $435.8 million and effective tax rates of 27.0% and 27.5%, respectively. Our income tax rate in fiscal 2013 is impacted by the mix of earnings across the jurisdictions in which we operate and by a benefit associated with depletion.

Read the The complete Report

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