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Mosaic, Intrepid shares tumble on disappointing earnings

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Shares in fertilizer companies Mosaic and Intrepid Potash tumbled thanks to worse than reported quarterly results, as weak potash prices weighed on profits.

US fertilizer producer Mosaic reported a net-loss of $900,000 in the first three months of 2017, compared with a profit of $256.8 million, a year earlier.

Adjusted earnings were just 4 cents per share, well short of analysts' average estimate of 19 cents.

Net sales were down 5.7%, at $1.58bn, well below estimates of $1.67bn.

Selling prices fall

Mosaic reported average selling prices for muraite of potash down 17% over the three months to March 31.

Selling prices for diammonium phosphate fell 8% over the same period.

Mosaic's earnings over the period were also hit by production disruptions at its Esterhazy K2 potash mine in Saskatchewan.

Improving prospects

But the company expects earnings to "meaningfully improve," over the second quarter of the year, thanks to higher realised prices for potash and phosphate.

"The near-term market outlook for potash remains constructive, and we expect gradual improvement in our business results," Mosaic said.

The company also expects margins to improve in its phosphates business for the rest of 2017, thanks to improving market conditions.

Mosaic shares were down 7.0% in late-morning deals, at $24.98.

Intrepid also disappoints

Intrepid Potash also missed earning expectations, despite rising profits in its potash segment.

Intrepid's potash production and sales volumes fell sharply, by some 54%, thanks to the closure of some high-cost facilities.

But realised potash prices actually ticked up, by 11% year on year, "as reduced volumes enabled Intrepid to focus its sales into higher margin locations and markets".

And the gross margin of the potash segment rose to $2.33m, compared to a loss of $11.96m, thanks to the closure of higher-cost facilities and the higher sales price.

Across the company, sales came in at $48.33m, compared to $73.30m over the same period a year ago.

The company reported a loss of $0.16 cents a share, compared to the $0.08 loss analysts expected.

Intrepid shares were down 5.1% in late-morning deals in New York, at $1.69.

By William Clarke

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