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3 Key Metrics You Shouldn't Miss in the Mosaic Company's Q2 Earnings Report

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Investors in The Mosaic Company (NYSE:MOS) must be panicking after Potash Corporation's (NYSE:POT) second-quarter earnings report, which was nothing short of a disaster. PotashCorp's Q2 earnings slumped almost 70% year over year, compelling it to not only downgrade its full-year guidance but also slash its dividends. In short, the report had everything to make investors break into a sweat, and enough to raise concerns about what Mosaic might report when it releases its Q2 numbers on Aug. 2.

Given the shape of the fertilizer industry, I can almost guarantee that Mosaic's sales and profits must've tanked in the second quarter. But the important question for investors is whether Mosaic can survive the ordeal and come out a winner in the long run. That'll largely depend on how the company executes in the three key areas I'll discuss here. If Mosaic delivers on these fronts in Q2, investors might even consider a post-results drop in share prices an opportunity.

Cost of production

PotashCorp realized almost 40% and 12% lower average prices for potash and phosphate, respectively, during its second quarter. Mosaic's sales, undoubtedly, must've taken a hit, too, as it deals in both nutrients. In such a situation, the only saving grace can be Mosaic's capabilities to cut costs. Mosaic showed promise in Q1, when it kept its potash production costs flat but reduced its phosphate costs despite a lower operating rate. It'll be great to see the trend continue into the second quarter. On the flip side, if Mosaic announces plans to idle more plants, it'll indicate...


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