Mosaic Second Quarter Earnings Preview

By Investopedia Staff | December 31, 2012 AAA

On Friday, January 4, 2013, Mosaic (NYSE:MOS) will announce its second quarter earnings. The consensus analyst estimate has dropped from $1 a share to the current estimate of earnings of 98 cents a share.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Earnings: Quality Means Everything

What to Expect: The consensus estimate is down from three months ago when it was $1.33. Analysts are projecting earnings of $4.50 per share for the fiscal year.

Mosaic is expected to report revenue of $2.54 billion for the quarter, down by 15.7% from last year's figure of $3.01 billion. The anticipated revenue for the fiscal year is $9.63 billion.

Company Performance: Revenue has slipped year-over-year over the last three quarters. In the most recent quarter, it fell 18.8% to $2.51 billion. Previously, revenue slipped 1.4% in the fourth quarter of the last fiscal year and 1.1% in the third quarter of the last fiscal year.

MOS' P/E ratio is 13.1. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio

The stock price has fallen 1% since October 2, 2012, from $55.76 to $55.20. Mosaic's best recent streak was when its price gained $2.85 per share between December 7, 2012 and December 12, 2012.

The Competition: The Mosaic Company is a producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry. Most analysts (11 of 17) rate Mosaic a buy. In the last three months, the number of buy ratings has increased slightly.

The company's closest competitor in the non-metallic mining industry is Potash Corp./Saskatchewan (POT). Analysts are less optimistic about Mosaic than about Potash Corp./Saskatchewan. Eleven out of 22 analysts rate the latter a buy.

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