3 Reasons Mosaic Stock Could Move Big Next Week презентация

Lower production costs Lower production costs

Story so far Mosaic’s potash cash cost of production hit near-record low of $86 per tonne in Q1. The company expects “upper 30%” potash gross margin for Q2.

What to watch With potash demand and prices under pressure, can Mosaic sustain gross margins above 30% for Q2 and full year? Target production cost for the year and beyond. Lower costs = strong competitive advantage over peers.

Tight grip over operating expenses Tight grip over operating expenses

Story so far Rightsizing efforts are showing up: Mosaic’s selling, general, and administrative expenses declined 16% year over year in Q1. That boosted Q1 operating profit by 20% year over year.

What to watch Full-year guidance for SG&A expenses: Mosaic incurred $382 million in 2014. Target cost savings and operating earnings projections for the near future.

Growing cash flows and shareholder returns Growing cash flows and shareholder returns

Story so far Mosaic’s free cash flow climbed 20% year over year in Q1. It generated nearly $1.4 billion in FCF last year. In May, Mosaic raised its quarterly dividend by 10% and announced share repurchase program worth $1.5 billion.

What to watch Cash flow projections for 2015: With greater capital expenditures outlined for the year, will Mosaic’s FCF continue to expand? Capital allocation plans: Whether Mosaic intends to plow back profits into business, or return more to shareholders.