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Mosaic Misses Earnings Expectations, but Stock Rises

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Aug. 5 2016, Published 11:27 a.m. ET

Mosaic’s 2Q16 earnings

Mosaic (MOS) reported its 2Q16 earnings on August 2, 2016, with adjusted EPS (earnings per share) of $0.07 and a GAAP (generally accepted accounting principles) EPS of -$0.03 per share. The adjusted EPS missed analysts’ estimate of $0.12. However, the company’s shares rose by 2.4% to close at $27.26. YoY (year-over-year), Mosaic’s EPS significantly declined to $1.05 per share in 2Q15.

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2Q16 earnings overview

Mosaic’s dismal earnings are not surprising, given that the agricultural environment (MOO) is in its bottom cycle. Falling fertilizer prices, delays in demand, weakening international currencies, higher inventories, and the anticipation of new supply were some of the reasons cited by the company during the earnings call.

These factors have also impacted companies such as PotashCorp (POT), which reported a 39% decline in its earnings this quarter. Read PotashCorp Falls after Meeting 2Q16 Estimates: What’s Missing? to learn more. It would not be surprising to see CF Industries (CF) and Agrium (AGU) impacted by the aforementioned factors as well.

Series overview

In this series, we’ll look at some of Mosaic’s key metrics. We’ll also see notes from the analysts’ Q&A session, which will give us a peek into issues and concerns that were not completely addressed by management during the earnings call. We’ll look at management’s commentary on the company as well as the industry outlook for the coming quarters. We’ll wrap up the series with Mosaic’s next-12-month price target. In the next part of this series, we’ll discuss the company’s net sales.

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