Mosaic Co., North America’s second- largest crop-nutrient producer, said first-quarter profit dropped 92 percent as farmers bought less potash and phosphate- fertilizer prices plunged.
Net income tumbled to $100.6 million, or 23 cents a share, in the three months ended Aug. 31, from $1.18 billion, or $2.65, a year earlier, Plymouth, Minnesota-based Mosaic said today in a statement. Analysts expected profit of 34 cents, the average of 12 estimates in a Bloomberg survey.
Chief Executive Officer Jim Prokopanko has cut output of potash, a form of potassium, to bolster prices and pare inventories. Prices for phosphate-based nutrients including diammonium phosphate have stabilized after plunging as wheat, corn and soybean futures dropped from record highs last year.
“Potash demand and pricing are the big question marks right now,” Ben Johnson, an analyst at Morningstar Inc., said in an interview before the earnings were announced. “Farmers are still sitting on their wallets. The price risk is to the downside.”>>>MORE
Mosaic earnings drop 91 pct; sees pickup ahead
* Company optimistic purchases of fertilizer to return
* Stock gains slightly in after-hours trading (Recasts first paragraph to include company optimism; adds detail on crop production; updates share movement)
By Ernest Scheyder
NEW YORK, Oct 5 (Reuters) - Fertilizer maker Mosaic Co (MOS.N) posted a 91 percent drop in fiscal first-quarter profit on Monday but expressed optimism that farmers would increase fertilizer purchases.
Farmers, many of whom had stocked up on fertilizer earlier this year on fears prices would rise even higher, held back during the three months ended August on purchases of key nutrients needed for crop production.
The company said it remains optimistic that farmers will apply more fertilizer for next year's crop. Industry analysts worry that because the 2009 corn crop went in late, there may not be time for a fall fertilizer application....MORE