By Connor Hart
Mosaic is facing surging costs due to the war in the Persian Gulf.
The fertilizer producer said Monday that prices for key ingredients such as sulfur, ammonia and urea are continuing to climb as demand increasingly outstrips supply. As a result, the company is curtailing some production, cutting capital spending and reassessing operating plans.
"Many producers are struggling to secure raw materials, resulting in an already tight market becoming even tighter," Chief Executive Bruce Bodine said on a call with analysts. "To put it simply, there is not going to be enough phosphate to meet global demand."
The higher input costs contributed to Mosaic swinging to a first-quarter loss and withdrawing its phosphate production guidance for the year. The results came in below already muted expectations and weighed on shares, Morgan Stanley analysts said. They added the guidance withdrawal was an unwelcome surprise for investors.
The stock was recently trading 1% lower at $21.98. Shares have lost more than a third of their value in the past year.
Sulfuric acid is the most consumed chemical on the planet and a key ingredient in phosphate fertilizer. It is produced by smelting and refining nonferrous metals, such as copper and nickel, or by burning sulfur, a byproduct of oil-and-gas processing.
The acid has become one of the most disrupted commodity markets since the war started in late February. A large chunk of the world's sulfur comes from the Persian Gulf and has been choked off at the Strait of Hormuz, and new Chinese export restrictions are raising further concerns about availability.
To preserve cash and protect margins, Mosaic said it has partially curtailed production at facilities in Louisiana and Florida, while also scaling back additional fertilizer output in Brazil. Bodine said the moves are temporary and intended to reduce the need to buy sulfur at current prices, with operations able to restart quickly when market conditions improve.
The company also cut its capital-expenditure outlook for the year by $250 million, to $1.25 billion, after reviewing projects and deferring less time-sensitive spending. Mosaic noted the revised plan wouldn't affect its longer-term production targets.
Despite incremental pressure in its phosphate business, Mosaic said its potash business remains a bright spot, unaffected by recent geopolitical turmoil and continuing to produce strong results.
The company swung to a first-quarter loss of $257.6 million, or 81 cents a share, from a profit of $238.1 million, or 75 cents a share, a year earlier. Stripping out certain one-time items, adjusted earnings of 5 cents a share missed analyst expectations for 24 cents a share.
Net sales climbed 14% to $3 billion, ahead of Wall Street models for $2.93 billion.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
May 11, 2026 13:14 ET (17:14 GMT)
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