The Mosaic Co. says weak international demand for its crop nutrients has hurt sales volumes, which may not pick up until 2013.
The Plymouth, Minn.-based company, which sells phosphate and potash, lowered its second-quarter production guidance and tightened its price forecast as a result.
Shares of the company fell more than 4 percent in after-hours trading on the news.
Mosaic said international crop nutrient market demand has fallen as distributors are holding off on purchases to avoid price risk. The company believes this demand is simply delayed, but said sales volumes may not pick up until 2013.
The company had previously forecast second-quarter potash volumes of 1.6 million to 1.9 million metric tons, which already excluded shipments to India and China. Mosaic now forecasts shipments in the range of 1.3 million to 1.4 million metric tons, as other international buyers have followed suit and held off on purchases.
The company expects its phosphate volume to be in the range of 2.9 million to 3.1 million metric tons, down from its prior forecast of 3 million to 3.4 million metric tons.
Prices for both products are expected to be at the higher end of their projected ranges.
Jim Prokopanko, President and CEO of Mosaic, said that long-term demand for crop nutrients remains strong and this international weakness comes in spite of very strong demand in North America.
Mosaic also said Tuesday that it is decreasing the amount of unrecognized tax benefits reported on its balance sheet by $200 million in the second quarter due to the resolution of tax audit activity. As a result, it now expects its tax rate for 2013 will be in the mid-teens
The company made the announcement ahead of a presentation at the Dahlman Rose & Co. Global Metals, Mining Materials Conference in New York City on Wednesday.
Shares of the company fell $2.28 to $48.47 in after-hours trading. They fell 38 cents to close regular trading at $50.57 before it released the updated guidance.