Mosaic Co. (MOS) Trading Report After Hours Earnings

Date: 3/30/2011

Mosaic Co. (MOS) Trading Report After Hours Earnings PLYMOUTH, Minn., March 30, 2011 /PRNewswire/ -- The Mosaic Company (NYSE:MOS - News) announced today record third quarter net earnings of $542.1 million, or $1.21 per diluted share, for the quarter ended February 28, 2011. These results compare with net earnings of $222.6 million, or $0.50 per diluted share, for the third quarter ended February 28, 2010.

KEY ITEMS

Total phosphate sales volumes were 2.4 million tonnes and the average diammonium phosphate (DAP) selling price was $543 per tonneTotal potash sales volumes were 1.9 million tonnes and the average muriate of potash (MOP) selling price was $358 per tonneGross margin as a percent of net sales significantly improved to 39 percent, compared to 28 percent in the prior yearThe Company announced an agreement to distribute Cargill's approximately 64 percent stake in Mosaic to Cargill stockholders and debt holders in a recapitalization and split-off transaction, followed by an orderly disposition of shares in a series of secondary offerings"Our record third quarter results reflect outstanding market fundamentals and effective operational execution," said Jim Prokopanko, President and Chief Executive Officer of Mosaic.

"The world's expanding need for food reinforces strong, long-term demand for crop nutrients. We are executing our strategy to increase potash capacity, leverage our scale and improve operations. With robust earnings, healthy margins and a strong balance sheet, Mosaic is well positioned for future growth."Mosaic's net sales in the third quarter of fiscal 2011 were $2.2 billion, an increase from $1.7 billion compared to the same period last year.Mosaic's gross margin for the third quarter of fiscal 2011 was $853.6 million, or 39 percent of net sales, compared with $476.5 million, or 28 percent of net sales, a year ago. Third quarter operating earnings were $770.8 million, nearly double operating earnings of $388.9 million last year.

The increases in gross margin and operating earnings were primarily due to significantly higher phosphate selling prices and the favorable effect of higher potash production, partially offset by higher raw material costs in the Phosphates segment.PhosphatesNet sales in the Phosphates segment were $1.5 billion for the third quarter compared to $1.0 billion last year. Gross margin was $454.2 million, or 31 percent of net sales, compared with $114.0 million, or 11 percent of net sales for the same period a year ago. Operating earnings were $371.8 million, compared to $52.9 million in the prior year.

The improvement in operating earnings was primarily due to increased phosphate selling prices, partially offset by higher raw material costs.The average third quarter DAP selling price, FOB plant, was $543 per tonne, compared to $336 a year ago. Phosphates segment total sales volumes were 2.4 million tonnes, down slightly compared to 2.5 million tonnes a year ago. The Company expects finished product inventories to remain relatively low.Mosaic's North American finished phosphate production was 2.0 million tonnes, or 83 percent of operational capacity, compared to 1.9 million tonnes, or 75 percent, a year ago. The Company's phosphate rock production was 3.4 million tonnes during the third quarter, up from 3.0 million tonnes a year ago, due to better mining performance this quarter and planned maintenance in the year ago quarter.

"Favorable market conditions as well as our ongoing focus on operational excellence produced outstanding bottom line results in our Phosphates segment," stated Prokopanko.PotashNet sales in the Potash segment totaled $757.7 million for the third quarter, compared to $730.0 million a year ago. Gross margin was $411.6 million, or 54 percent of net sales, compared with $352.0 million, or 48 percent of net sales, a year ago. Operating earnings were $413.9 million, compared to $326.0 million in the prior year.

The improvement was primarily due to the favorable effect of higher production volumes, increased selling prices and an insurance recovery of $38.2 million.The average third quarter MOP selling price, FOB plant, was $358 per tonne compared to $356 a year ago. International MOP prices increased during the quarter narrowing the gap with North American prices. Compared to last quarter, the average MOP selling price increased eight percent. The Potash segment's total sales volumes for the third quarter were 1.9 million tonnes, comparable to volumes a year ago.