(Recasts with M&A interest, spike in stock)
By Kanika Sikka and Rod Nickel
Feb 11 (Reuters) - U.S. fertilizer company Mosaic Co
MOS.N , grappling with falling prices and profits, is looking
for acquisitions that could be bargain-priced in a weak
commodity sector.
The world's largest producer of finished phosphate products
on Thursday forecast lower selling prices for potash and
phosphate in the current quarter. The Plymouth, Minnesota-based
company also reported fourth-quarter profit that fell less than
expected, and announced a $75 million share repurchase program.
Its shares jumped nearly 5 percent in early trading on the
New York Stock Exchange.
Chief Executive Joc O'Rourke said the company is interested
in acquisitions related to either potash or phosphate, but would
weigh any opportunities against the benefits of further
repurchases of its stock, which has fallen about 50 percent over
the past year.
"The down parts of the (commodity) cycle do present
opportunities," Chief Financial Officer Rich Mack said on a call
with analysts. "If there is something that is extraordinarily
compelling, it's something that we could act on."
Fertilizer producers' profits have been hit by falling
prices, largely due to weak currencies in countries such as
Brazil and low grain prices. Falling currency values against the
U.S. dollar have lowered production costs 17 percent in Canada,
where Mosaic's largest potash mines are located, but the savings
amount to 41 percent in Belarus, where potash rival Belaruskali
operates, Mosaic said.
It expects phosphate prices to fall as much as 14.6 percent
to $350 per tonne in the current quarter and potash prices to
fall as much as 21 percent.
Mosaic forecast global phosphate shipments in 2016 of 65
million to 67 million tonnes, up from 64.4 million last year,
according to BMO Nesbitt Burns. Potash shipments look slightly
lower this year at 58 million to 60 million tonnes, down from
60.7 million in 2015.
The company said last week that it would cut output of
phosphates by up to 400,000 tonnes in the first quarter, due to
weak demand.
Adjusted earnings per share was 53 cents, compared with
average analysts' estimates of 44 cents per share, according to
Thomson Reuters I/B/E/S.
Fourth-quarter net earnings fell to $155 million, or 44
cents per share, in the fourth quarter ended Dec. 31, from
$360.7 million, or 97 cents per share, a year earlier.
Net sales fell 9 percent to $2.16 billion.