For 1Q17, analysts estimate that Mosaic (MOS) will report gross income of $181 million—down from $237 million in 1Q16. This would result in a margin contraction from 14% in 1Q16 to 11% in 1Q17. While the gross margin for 1Q17 is expected to contract, we’ll look at the estimates for fiscal 2017 for the larger picture.
For fiscal 2017, analysts estimate a gross income of $891 million for Mosaic—up from $780 million in fiscal 2016. This would also result in a gross margin expansion from 10.9% to 12.1% YoY (year-over-year). We should note that while the company’s sales are estimated to grow by 3% YoY, its gross income is estimated to rise 14% in fiscal 2017, which indicates cost optimization at the level of cost of goods.
We’ll use EBITDA (earnings before interest, tax, depreciation, and amortization) as a measure of operating performance. Mosaic’s EBITDA income in 1Q17 is estimated to come in at $270 million, down from $409 million one year previously. Its first quarter EBITDA margins, based on these estimates, will likely contract from 24% to 16%. However, the EBITDA margin for fiscal 2017 is estimated to move slightly higher, up to 16.6% from 16.2% one year previously.
Next, we’ll discuss the earnings per share estimates for Mosaic.