The falling price for fertilizer hit The Mosaic Company’s profits hard in its fourth quarter, as they declined from $155 million a year ago to $12 million in the last three months of 2016.
In response, the Plymouth-based fertilizer company cut its annual dividend from $1.10 a share to 60 cents.
However, Mosaic CEO Joc O’Rourke expressed optimism that the farm economy was bound to improve this year.
“While we are confident the market bottom is behind us, the pace of improvement is expected to be gradual,” he said in a statement. “Our fourth quarter results reflect strong market demand for [fertilizer ingredients] potash and phosphates driven by improving market sentiment, as well as benefits from significant operational improvements.”
Fourth quarter production costs related to potash, as well as its selling and administrative expenses, were the lowest the company reported in nearly a decade.
Sales for the quarter topped $1.82 billion, matching Wall Street’s estimate, but falling below the $2.16 billion in sales during Mosaic’s year-ago quarter. The company’s fourth quarter earnings per share of 3 cents, however, did not meet Wall Street’s 12-cent prediction.
For the full year, Mosaic took in $7.16 billion in sales, compared with sales of $8.9 billion in 2015. Its full-year profits also fell significantly, from just over $1 billion last year to $297 million in 2016.
As of mid-day Tuesday, Mosaic shares are up 0.5 percent from Monday’s close price to $32.21.