Fertilizer producer Mosaic (NYSE:MOS) reported earnings before the market opened today and the results were less than impressive. Sales fell 27.8% to $1.91 billion and net income dropped 70.2% to $124.4 million.  

Potash sales volume was 1.38 million tonnes, which fell below the company's own guidance of 1.45 million to 1.65 million tonnes. The weakness was driven by a later than normal fall application season and buyers being more cautious than usual.

On the phosphate side, selling prices and volumes were $436/tonne and 2.7 million tonnes, respectively, which were in-line with expectations. With that said, sales were still down 18% from a year ago in the phosphate business.

Despite the near-term weakness, Mosaic is still bullish on both the potash and phosphate businesses, as indicated by its $1.4 billion buyout of CF Industries late last month, including escrow contributions. This will allow Mosaic to forgo building its own ammonia plant and is expected to add $0.30 per share in earnings next year.

This looks like a very weak quarter on the surface, but there are cyclical forces at work in the fertilizer market. Long term, I don't think this changes the investment thesis, but it's a bump in the road, no doubt.

link

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.