Phosphate and potash crop-nutrient producer Mosaic has reported a substantially higher profit for the fourth quarter, as sales grew 54% on increased selling prices and volumes. Looking ahead, the company provided a positive outlook for fiscal year 2012.

For the fourth quarter, Mosaic's profit surged to $649.2 million or $1.45 per share from $396.1 million or $0.89 per share in the year-ago period.
Results for the quarter include $52 million or $0.07 per share of discrete expenses that included an asset write-off, additional environmental accruals, multi-year community investments, and Cargill split-off transaction expenses.

Revenues for the quarter grew 54% to $2.860 billion from $1.860 billion in the year-ago quarter. Five Wall Street analysts had a consensus revenue estimate of $2.54 billion for the quarter.

Net sales in the Potash segment increased to $982.4 million from $696.5 million a year ago. The average fourth quarter MOP selling price, FOB plant, was $404 per ton, up from $336 last year. Potash production was 2.2 million tons or 95% of operational capacity, an increase from 1.9 million tons or 85% of operational capacity a year ago.

Net sales in the Phosphates segment increased to $1.882 billion from $1.187 billion last year. The average fourth quarter DAP selling price, FOB plant, was $574 per ton, compared to $438 a year ago. Phosphates segment total sales volumes increased to 2.8 million tons from 2.3 million tons a year ago.

Gross margin for the quarter, however, dropped to 35% of net sales from 37% of net sales a year ago, reflecting increased phosphate raw material costs and potash resource taxes and royalties.

For the full year, net income was $2.514 billion or $5.62 per share, compared to $0.827 million or $1.85 per share a year ago. Net sales for the full year increased 47% to $9.9 billion from $6.8 billion reported a year ago.

The company announced it would pursue all options, including appeals, to defend itself against an injunction entered by the U.S. District Court for the Middle District of Florida preventing mining in the Hardee County extension of the South Fort Meade mine. Mosaic intends to seek a stay of the preliminary injunction pending appeal as to the uplands-only mining.

Mosaic operates independently of Cargill, Inc as of May 25, 2011. Cargill closed its split-off after divesting its entire 64% stake to Cargill shareholders and debt holders.

Stating that 2011 was an exceptional year, Jim Prokopanko, president and chief executive officer of Mosaic, said the company anticipates another good year in fiscal 2012 on continued healthy global nutrient demand.

Prokopanko said, "With excellent farmer economics and with grain and oilseed inventories expected to remain near record lows, farmers are incented to use crop nutrients to enhance their yields."

Providing its guidance for the first quarter, Mosaic expects potash sales to range from 1.7 to 1.9 million tons, and the realized MOP price, FOB plant, to range from $430 to $455 per ton.

Total sales volumes for the Phosphates segment are expected to range from 3.0 to 3.3 million tons for the first quarter, with realized DAP price, FOB plant, expected to range from $560 to $590 per ton. Total capital spending for fiscal 2012 is expected to range from $1.6 to $1.9 billion.