Mosaic (MOS - Analyst Report) saw a healthy rise in its profit in first-quarter 2015, helped by higher pricing across both phosphate and potash businesses, increased phosphate sales volumes and lower production costs in the potash franchise.

Mosaic’s profit was $294.8 million or 80 cents per share in the reported quarter, climbing roughly 36% from $217.5 million or 54 cents a share a year ago. Earnings, barring one-time items, were 70 cents per share. By that measure, it fell short of the Zacks Consensus Estimate of 75 cents.

The Minnesota-based fertilizer maker’s revenues rose roughly 8% year over year to $2,139.1 million in the quarter on healthy sales gain in its core phosphates business. Sales, however, missed the Zacks Consensus Estimate of $2,242 million.

Selling, general and administrative expenses fell roughly 16% year over year to $100.4 million in the quarter on the company’s cost containment measures.

Segment Highlights

Revenues from Mosaic’s Phosphates segment climbed roughly 25% year over year to $1.2 billion in the quarter on increased finished product prices and higher volumes. Average selling price rose around 11% to $458 per ton in the quarter from $413 per ton last year.

The segment’s gross margin rose around 11% to $222 million, aided by higher pricing. Segment sales volumes went up roughly 10% year over year to 2.3 million tons.

Potash division’s sales fell around 11% year over year to $653 million in the quarter as higher prices were more than offset by lower volumes. Sales volumes fell roughly 17% year over year to 2 million tons while selling price rose roughly 8% to $288 per ton from $267 per ton a year ago.

Gross margin rose 12% year over year to $242 million, supported by lower cost of production and higher pricing. The Potash division recorded the lowest quarterly cash costs per ton in the company’s history.

Revenues from the International Distribution segment rose around 12% year over year to $439 million on higher volumes and pricing. Gross margin fell around 5% to $21 million. Selling price inched up 1% to $444 per ton while volumes rose roughly 11% to 1 million tons.

Financials

Mosaic ended the quarter with cash and cash equivalents of $2,517.4 million, up around 1% year over year. Long-term debt climbed roughly 25% over year to $3,775.2 million. Mosaic’s capital expenditures were $230 million in the reported quarter. Operating cash flow was $655.5 million in the quarter, up around 5% year over year.

Outlook

Moving ahead, Mosaic sees healthy demand to continue in its phosphates business and expects to gain from its strategic actions. The company expects phosphates sales volumes in the band of 2.3 to 2.7 million tons for the second quarter compared with 2.6 million tons achieved a year ago. Average selling price for the quarter is expected to be in the band of $425 to $450 per ton. The segment’s gross margin for the quarter is expected to be roughly 20%. Operating rate is expected to be 80%-85%.

Potash sales volumes have been forecast in the range of 2 to 2.4 million tons for the quarter versus 2.5 million tons a year ago. Average selling price for the quarter is expected in the range of $265 to $290 per ton. The segment’s gross margin is expected to be in the high 30% range. Operating rate has been forecast in the 85%-90%.

Sales volumes for the International Distribution segment are expected in the band of 1.4 to 1.7 million tons for the second quarter compared with 1.2 million tons a year ago. Segment gross margin is expected to be in the range of $18 to $25 per ton for the quarter.

For 2015, Mosaic expects phosphates sales volumes in the band of 9 million to 10 million tons. Potash sales volumes are expected in the range of 8.5 million to 9 million tons for the year. Sales volumes for the International Distribution segment are expected to be 6 million to 7 million tons. Capital expenditures and investments are expected in the range of $1.1 billion to $1.4 billion.

Mosaic, in Mar 2014, completed its takeover of CF Industries’ (CF - Analyst Report) phosphate business for $1.4 billion. Mosaic has completed the integration of the acquired business.

Moreover, Mosaic wrapped up its takeover of Archer Daniels Midland's (ADM - Analyst Report) fertilizer distribution business in late 2014. The buyout accelerates Mosaic’s existing growth plans in Brazil and expands its annual distribution capability in one of the world’s rapidly growing agricultural regions. Integration of the acquired business is progressing according to the plan.

Mosaic is a Zacks Rank #3 (Hold) stock.

A batter-ranked stock in the fertilizer space is Rentech Nitrogen Partners, L.P. (RNF - Snapshot Report), sporting a Zacks Rank #2 (Buy).