Mosaic (MOS) Q3 2026: Sulfur Costs Trigger a Deep Earnings Miss
As seen on the 24/7 Wall St. homepage on November 3, 2026.
Sulfur costs pushed phosphate to a $194 million operating loss, against a $102 million profit a year ago, overwhelming a slight revenue beat. Management says relief from the cheaper $615 per long ton sulfur contract does not reach earnings until Q1 2027, with Q4 phosphate margins set to fall further.
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Mosaic reported a loss of $0.19 per share for the third quarter of 2026, badly missing the consensus estimate of negative $0.02. The gap represented a shortfall of more than 1,100%, making it one of the most severe earnings misses in the company's recent history despite revenue of $3.10 billion exceeding expectations at a $3.05 billion forecast.
The damage was concentrated almost entirely in the Phosphate segment, which swung to an operating loss of $194 million from a $102 million profit in the same period a year ago. Sulfur averaging $715 per long ton and ammonia at $619 per tonne hammered input costs, while production curtailments pushed idle and unabsorbed fixed costs to $77 million. Gross profit company-wide collapsed 84.77% year over year, and operating income turned negative at $96.6 million.
Management secured a Q4 sulfur contract at $615 per long ton, a meaningful step down from the $715 average that did the damage in Q3. However, those cheaper inputs do not flow through the income statement until Q1 2027, meaning Q4 phosphate stripping margins and adjusted EBITDA are guided to fall further before conditions improve. Phosphate volumes for Q4 are guided at 1.3 to 1.6 million tonnes at DAP plant prices of $820 to $840 per tonne.
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Despite the earnings pain, Mosaic's cash position offered a partial counterpoint. Operating cash flow came in at $284 million, up 24.46% year over year, aided by a drawdown in finished goods inventories. Capital expenditures of $281.5 million left free cash flow essentially breakeven at $2 million for the quarter, and the company noted its $2.5 billion revolving credit facility remained fully available after refinancing extended all long-term debt maturities through 2028.
Looking further out, management pointed to tightening phosphate market conditions including low North American and Brazilian inventories and minimal Chinese DAP and MAP exports as reasons for optimism. Mosaic Biosciences, the company's specialty biologicals unit, is on track to double full-year 2026 sales to $135 million. Capex for 2027 is targeted below $1 billion, down from the full-year 2026 guidance of $1.2 billion, as the company pursues cost reductions and a strategic portfolio review that includes a sale process for the Araxá facility in Brazil.
Mentioned: MOS