Thursday, May 29, 2014

Mosaic Co: Cost Cuts Won't Help


The highly profitable fertilizer business continues to remain under pressure as the thesis is that the supply/demand equation remains challenged. To address its substantially lower earnings during the first quarter, Mosaic  (NYSE: MOS  ) rehashed its intent to eliminate 500 positions as part of a long-term plan to cut costs by $500 million.

This follows the recently implemented plan by Potash Corp (NYSE: POT  ) to reduce costs following the crash in potash prices after the Belarusian marketing arrangement between Belarus and Russia broke up. With margins still relatively high in the potash market and the prime additional customers in the emerging markets of China and India unable to afford high prices, one has to wonder if the fundamental growth prospects aren't flawed.

Read the full article here.


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