April 1, 2010 / 4:29 PM / 9 years ago

Mosaic shares drop after results miss Street view

NEW YORK (Reuters) - Mosaic Co (MOS.N) expressed optimism about its business and the economy on Thursday, but investors disappointed with its quarterly earnings sent the fertilizer producer’s shares down nearly 4 percent.

The company said late Wednesday that profit more than tripled to 50 cents per share in the third quarter ended February 28, but the results missed Wall Street expectations by 11 cents.

Despite the miss, Mosaic expects a strong spring planting season, executives said on a conference call Thursday morning.

“We continue to see signs of global economic recovery, and our business continues to improve,” Chief Financial Officer Larry Stranghoener said.

The company forecast “modestly constrained” fourth-quarter phosphate production of 2.4 million to 2.8 million metric tons, with spot pricing of about $420 to $460 per metric ton.

“We wish we had more product to sell, because the demand is there,” Stranghoener said.

Credit Suisse analyst Elaine Yip attributed the third-quarter results to weaker-than-expected third-quarter phosphate production, as well as higher costs.

Phosphate is the second-most important nutrient that farmers need to apply to crops, after nitrogen. Potash is the third.

Mosaic owns a large phosphate production facility in Florida and several smaller potash mines elsewhere in the United States and Canada.

For potash production in the fourth-quarter, Mosaic expects sales of 1.9 million to 2.3 million metric tons, with spot pricing of about $325 million to $365 million per metric ton.

“We are confident that demand in both of our businesses will remain strong,” Stranghoener said.

The Plymouth, Minnesota-based company, along with Agrium Inc AGU.TO and Potash Corp POT.TO, owns fertilizer exporter Canpotex. It expects Canpotex to cement a supply deal with India in the “not too distant future,” Mosaic Chief Executive Officer Jim Prokopanko said.

The contract would be extremely important to all three Canpotex owners, as India is one of the world’s largest consumers of fertilizer.

Also late Wednesday, Mosaic said it would pay Vale SA VALE5.SA $385 million to participate in a proposed joint venture with the Brazilian mining company and Mitsui & Co MTSUIG.UL for the Bayovar phosphate rock mine in Peru.

Mosaic shares were down 3.8 percent at $58.46 in midday trading.

Reporting by Ernest Scheyder; Editing by Lisa Von Ahn

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