After markets closed today, The Mosaic Co. (NYSE: MOS) cut its guidance on fiscal second quarter shipment volumes and tightened its price forecasts to the upper end of its previous range. The maker of both phosphate and potash fertilizers said it still expects record high shipments of both types of fertilizer in calendar year 2013.
The company’s CEO said:
The long-term positive outlook for crop nutrient demand has not changed; high commodity prices are driving record farm returns and making our products more affordable than ever before. … In the short term, however, we are seeing lower than expected shipments to the export market, in spite of very strong demand in North America for the fall application season.
Shipments of potash have been cut from a range of 1.6 to 1.9 million metric tons to 1.3 to 1.4 million metric tons, reflecting “lower near-term demand in international markets, excluding China and India, which had already been accounted for in the earlier estimate. The company’s realized price estimate has also changed, from a previous range of $420 to $450 per metric ton to $435 to $450 metric ton.
In phosphate shipments, the company has lowered shipment guidance from 3 to 3.4 million metric tons to 2.9 to 3.1 million metric tons. Prices are expected to range from $535 to $550 per metric ton, at the high end of the previous range of $520 to $550 per metric ton.
Mosaic expects gross margins for phosphates to be roughly flat with the first fiscal quarter, but potash products could suffer from low operating rates that will put pressure on the expected gross margin rate in the low to mid 40% range.
The company also said it would “decrease the amount of unrecognized tax benefits reported on the balance sheet by approximately $200 million” to resolve a tax audit.
Shares of Mosaic are down about 4.8% in after-hours trading, at $48.30 after closing at $50.75. The 52-week range for the stock is $44.43 to $61.98.