Mosaic Discover Magic Money Mine But Shares Still Fall

The Mosaic Company announced yesterday net earnings of $1.2 billion, or $2.65 per share, for the first quarter ended August 31, 2008. These results compare with net earnings of $305.5 million, or $0.69 per share, for the quarter ended August 31, 2007.

Mosaic's gross margin for the first quarter fiscal 2009 was $1.6 billion, or 38.1% of net sales, compared with $521.8 million, or 26.0% of net sales, a year ago. First quarter operating earnings were $1.5 billion, compared with $449.6 million for the first quarter of fiscal 2008. Financial performance during the quarter continued to benefit from higher selling prices compared to the prior year. The significant increase in selling prices was due to strong agricultural fundamentals and positive fertilizer supply and demand factors. Mosaic also recognized a foreign currency transaction gain of $86.7 million.

A pretty decent set of figures for the largely Cargill-owned company you'd have thought? But no. Sales in Mosaic fell $12.67, or 19 percent, to $54.84 in overnight trade from Wednesday's close on the New York Stock Exchange. Shares were $163.25 as recently as June 18.

"Nobody cares about the quarter ended in August," said one hard-to-please analyst. "The focus is the outlook for the next quarter and the rest of the fiscal year."

The company said in a prepared statement that it will reduce phosphate production by 500,000 to 1 million tons in "the next several months" in response to increasing inventories.