January 4, 2011 / 9:31 PM / in 7 years

UPDATE 3-Mosaic profit, sales widely beat Street

* Fiscal Q2 adj EPS $1.01 vs. Street 91 cts/shr

* Revenue up 56.4 percent, beats Street’s forecast

* Seasonal demand dip expected in fiscal Q3

* CEO says corn prices could move higher

* Shares rise 3 pct after-market (Adds analyst, CEO on Florida mine; updates stock)

By Ernest Scheyder

NEW YORK, Jan 4 (Reuters) - Strong demand for fertilizer driven by high U.S. crop prices helped Mosaic Co’s (MOS.N) quarterly profit and revenue beat Wall Street’s expectations, boosting shares in extended trading.

With prices for corn and soybeans near multiyear highs, farmers have strong incentive to plant as much as possible, a process requiring more phosphate and potash fertilizer.

In a bullish sign for Mosaic, plantings of corn and wheat are expected to rise in 2011, according to a Farm Futures magazine survey released on Tuesday. [ID:nN04274391]

“I think people will focus on the high crop prices,” Soleil Securities analyst Mark Gulley said. “It’s hard to find a chink in the armor right now. The outlook is very solid.”

It remains to be seen if U.S. farmers plant more corn than soybeans in 2011, Chief Executive Jim Prokopanko told Reuters, adding that the “fight for acres hasn’t been fought yet.”

Corns prices, which have spiked in the past 12 months, could move higher in 2011, Prokopanko said.

“Everything on the horizon that we see is in support of higher prices,” he said. “We really feel good and confident about the business. Demand is booming, and our outlook looks good from any angle.”

Mosaic, which is majority owned by U.S. agribusiness giant Cargill [CARG.UL], earned $1.03 billion, or $2.29 per share, in its fiscal second quarter, ended Nov. 30, compared with $107.8 million, or 24 cents per share, in the year-ago period.

Excluding gains from the 2010 sale of a stake in a Brazilian fertilizer producer, Mosaic earned $1.01 per share.

By that measure, analysts expected earnings of 91 cents per share, according to Thomson Reuters I/B/E/S.

PHOSPHATE, POTASH

Sales of phosphate, the second-most important fertilizer for farmers, rose 49 percent to $1.97 billion during the quarter.

For the fiscal third quarter, Mosaic expects phosphate volumes of 2.4 million to 2.7 million tonnes. Phosphate production has been curtailed in recent months due to the partial shut-down of a large Florida mine.

Returning the mine to 100 percent capacity is “one of our highest priorities,” Prokopanko said. The company has an extension agreement in place with authorities to mine 200 acres through the end of March, he said.

To reduce dependence on its phosphate business, Mosaic is in the middle of a $5 billion campaign to boost its potash capacity by more than 5 million tonnes over the next 10 years.

For the fiscal third quarter, Mosaic expects to ship 1.9 million to 2.1 million tonnes of potash.

During the fiscal second quarter, sales of potash rose 69 percent.

Mosaic’s overall revenue rose 56.4 percent to $2.67 billion. Analysts expected $2.44 billion.

Shares of Plymouth, Minnesota-based Mosaic rose $2.24, or 3 percent, to $77.24 in after-market trading.

The stock rose 27.8 percent during 2010. (Editing by Gunna Dickson, Phil Berlowitz and Steve Orlofsky)

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