Mosaic Co (02M) Q2 2026 Earnings Report

Mixed. The call details significant near-term challenges driven primarily by external sulfur supply disruptions and resulting phosphate curtailments, under-application of phosphate (driving agronomic risk) and some near-term cash pressure (approx. $500M expected shortfall). Offsetting these negatives are multiple company actions and strengths: secured sulfur contracts materially below spot for Q3, strong balance sheet and liquidity actions (term loan, refinancings, untapped revolver), meaningful SG&A reductions (-20% YoY), potash stability and growth projects (Esterhazy HydroFloat), resilient Brazil distribution and co-product margins, fast-growing Mosaic Biosciences, lower CapEx guidance ($1.2B) and an expected working capital release (forecast $300–500M) supporting sequential free cash flow improvement in Q3 and Q4. Overall the transcript portrays a company taking decisive defensive actions to manage a severe but (management believes) temporary market disruption, leading to a balanced view of risk and mitigation.

Mosaic guided third-quarter realized raw‑material costs of about $700–710/ton for sulfur and $610–620/tonne for ammonia (Q2 averages were $522/ton sulfur and $621/tonne ammonia), DAP FOB pricing of $820–840/tonne and implied stripping margins “well above” historical averages; phosphate sales guidance for Q3 was 1.1–1.4 million tonnes (Q2 produced/sold 1.4M t) and Q2 realized stripping margin was $422/tonne. They cut full‑year CapEx to $1.2B (from $1.25B/$1.5B prior) with roughly $300M expected in Q3 and a drop in Q4, reduced SG&A ~20% YoY with further declines forecast, and expect sequential free‑cash‑flow improvement in Q3 and Q4. Mosaic reiterated a $300–500M working‑capital release this year (≈$100–200M in Q3, majority in Q4), Q2 Fertilizantes EBITDA ≈$60M, Q2 MOP costs $84/ton (lower in H2), Biosciences on track to double revenues with ~ $30M Brazil sales in Q3 (~40% margin, ≈$12M contribution), Q2 idle/turnaround charges ≈$60M with Q3 incremental idle/turnaround of roughly $10–20M, and strengthened liquidity via a $1.0B term loan, $500M CP refinanced in June (remainder in July) and an untapped $2.5B revolver.