Key Players’ Phosphate Segment Margins in 1Q17
Mosaic (MOS) continued to enjoy higher margins at 7%—compared to Agrium’s (AGU) margins at 5%. Mosaic’s margins were flat year-over-year.
Ammonium phosphates are the most widely used phosphate fertilizers in the world. DAP is the most used among phosphate fertilizers.
Mosaic (MOS), PotashCorp (POT), Agrium (AGU), and Israel Chemicals (ICL) are some of the largest producers (MOO) of phosphate fertilizers like DAP and MAP.
PotashCorp’s (POT) low-cost potash production continued to help the company dominate other players in terms of potash gross margins.
Israel Chemicals (ICL) saw its prices fall as much as 8% YoY to $216 per ton. Average potash prices for PotashCorp (POT) fell 7% YoY to $166 per ton.
Overall, potash shipments grew 22% YoY in 1Q17. Potash shipments were significantly lower in 1Q16 as buyers waited to gauge price movements.
Terra Nitrogen (TNH) emerged on top with a gross margin of 39%. However, the company’s gross margins were slightly lower from 40% YoY (year-over-year).
In recent quarters, nitrogen fertilizer prices have been lower YoY including in 1Q17. Overall nitrogen prices continue to impact producers’ profitabilities.
Terra Nitrogen (TNH) saw the highest growth in shipments. Its shipments rose 45% YoY to 598 thousand metric tons from 411 thousand tons a year ago.
CVR Partners’ (UAN) sales rose the most by as much as 17% YoY. Compared to other big players, it recorded $85 million in sales during the quarter.
As of May 15, CVR Partners (UAN) was the biggest loser with a YTD return of -22%, while Mosaic (MOS) fell as much as 20% YTD.
Sociedad Química y Minera de Chile (SQM) has yet to announce its earnings, unlike most of the companies we’ve discussed so far in this series.
The Scotts Miracle-Gro Company (SMG) reported its 1Q17 earnings on May 2, 2017, with earnings per share (or EPS) of $2.78.
Like fertilizer companies (MOO) The Mosaic Company (MOS) and Agrium (AGU), CF Industries (CF) had a weak 1Q17.
Monsanto (MON) saw positive earnings results in 1Q17 compared to the other fertilizer companies (XLB) we’ve discussed so far in this series.
Like Monsanto (MON), FMC Corporation (FMC) is in the business of crop protection products. The majority of FMC’s sales come from its Agricultural Solutions segment.
Much like Agrium (AGU), The Mosaic Company (MOS) had a disappointing 1Q17. Mosaic reported flat or no earnings per share (or EPS), missing analysts’ consensus estimate of $0.17.
Unlike PotashCorp (POT), Agrium’s (AGU) performance failed to impress investors (XLB). The company reported earnings per share (or EPS) of -$0.08.
PotashCorp (POT) reported EPS (earnings per share) of $0.18 in 1Q17, almost double analysts’ consensus estimate for the quarter and double its EPS of $0.09 in 1Q16.
With the end of the earnings season, it’s time to look back at analysts’ recommendations and price target changes for some major agribusiness companies.