3 key takeaways from mosaic company’s q1 earnings report
TRANSCRIPT
![Page 1: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/1.jpg)
3 Key Takeaways From Mosaic Company’s Q1 Earnings Report
Image source: Mosaic Company
![Page 2: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/2.jpg)
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.
![Page 3: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/3.jpg)
Fertilizer markets are in bad shape1
![Page 4: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/4.jpg)
Numbers to note
NutrientSales 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
![Page 5: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/5.jpg)
Why the lower outlookChina: 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.
![Page 6: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/6.jpg)
Costs are trending
lower2
![Page 7: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/7.jpg)
Tight grip over expenses
![Page 8: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/8.jpg)
Numbers to noteMosaic 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.
![Page 9: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/9.jpg)
Why it matters With margins under pressure, lower costs should help
offset some of the weakness in sales going forward.
![Page 10: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/10.jpg)
Cash flows under
pressure? 3
![Page 11: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/11.jpg)
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.
![Page 12: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/12.jpg)
Key point to noteDividends paid > FCF by a gaping margin
![Page 13: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/13.jpg)
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
![Page 14: 3 Key Takeaways From Mosaic Company’s Q1 Earnings Report](https://reader035.vdocuments.us/reader035/viewer/2022070603/586f97341a28abcc238b4a65/html5/thumbnails/14.jpg)
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.