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3 Key Takeaways From Mosaic
Company’s Q1 Earnings Report
Image source: Mosaic Company
Mosaic released its first-quarter
earnings last week, reporting 19% and
13% year-over-year drops in its
revenue and net in...
Fertilizer
markets are
in bad shape
Numbers to note
Nutrient
Sales volumes (in million tonnes)
Actual 2015
2016 previous
projection
2016 revised
projection
Ph...
Why the lower outlook
China: No contracts for the year from the largest
potash consuming nation yet.
India: Lower subsid...
Costs are
trending
lower
Tight grip over expenses
Numbers to note
Mosaic lowered its selling, general, and
administrative expenses by 10% year
over year to $90 million in ...
Why it matters
With margins under pressure, lower costs should help
offset some of the weakness in sales going forward.
Cash flows
under
pressure?
Numbers to note
Mosaic generated only $30 million and
$338 million in free cash flow during Q1
and the past twelve months...
Key point to note
Dividends paid > FCF by a gaping margin
Despite deteriorating market
conditions, Mosaic remains free
cash flow positive and is doing a
good job curtailing expense...
The next billion-dollar iSecret
The world's biggest tech company forgot to show you something at
its recent event, but a f...
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3 Key Takeaways From Mosaic Company’s Q1 Earnings Report

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Why Mosaic's margins and cash flows are under pressure.

Publicado en: Economía y finanzas
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3 Key Takeaways From Mosaic Company’s Q1 Earnings Report

  1. 1. 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report Image source: Mosaic Company
  2. 2. Mosaic released its first-quarter earnings last week, reporting 19% and 13% year-over-year drops in its revenue and net income, respectively. Beyond those numbers, here are three key takeaways from Mosaic’s earning report that you must know.
  3. 3. Fertilizer markets are in bad shape
  4. 4. Numbers to note Nutrient Sales volumes (in million tonnes) Actual 2015 2016 previous projection 2016 revised projection Phosphate 9.4 9-10 9-9.75 Potash 7.9 7.5-8.5 7.5-8 While Mosaic doesn’t give out full-year revenue or profit guidance, it lowered its sales volumes estimates in Q1. Data source: Company financials
  5. 5. Why the lower outlook China: No contracts for the year from the largest potash consuming nation yet. India: Lower subsidies, drought conditions, and unfavorable exchange rates hurting demand. Brazil: Weak demand due to economic turmoil. North America: Slow start to the spring planting season, supply glut. The four markets account for nearly 70% of the world’s total fertilizer consumption.
  6. 6. Costs are trending lower
  7. 7. Tight grip over expenses
  8. 8. Numbers to note Mosaic lowered its selling, general, and administrative expenses by 10% year over year to $90 million in Q1. Mosaic also improved its full-year SG&A expenses guidance to $340 million-$360 million from $350 million- $370 million.
  9. 9. Why it matters With margins under pressure, lower costs should help offset some of the weakness in sales going forward.
  10. 10. Cash flows under pressure?
  11. 11. Numbers to note Mosaic generated only $30 million and $338 million in free cash flow during Q1 and the past twelve months, respectively. MOS lowered its 2016 capital expenditures guidance by $100 million- $200 million in Q1. However, that may not boost FCF if profits decline substantially.
  12. 12. Key point to note Dividends paid > FCF by a gaping margin
  13. 13. Despite deteriorating market conditions, Mosaic remains free cash flow positive and is doing a good job curtailing expenses. These factors should help Mosaic get back on the growth track once end markets rebound. Foolish bottom line
  14. 14. The next billion-dollar iSecret The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand- new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early-in- the-know investors! To be one of them, just click here.

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