Compass Minerals Intl Inc (CMP) shares jumped significantly on Tuesday, fueled by the company’s announcement of preliminary third-quarter revenue that surpassed analyst expectations. The company reported preliminary revenue of $202.9 million, exceeding the estimated $197.775 million. This positive performance was driven by strength in both the Salt and Plant Nutrition segments.
The Salt segment delivered a strong showing with adjusted EBITDA of $28.05 per ton. This was accompanied by a continued rise in the average sales price for sulfate of potash, reaching $691.27 per ton for the second consecutive quarter.
Meanwhile, the Plant Nutrition segment also demonstrated positive momentum, achieving an adjusted EBITDA per ton of $128.57 and an adjusted EBITDA margin of 18.6%.
Edward C. Dowling Jr., president and CEO of Compass Minerals, highlighted the strong performance of the core businesses, stating, “Compass Minerals’ core businesses produced strong results in the third quarter. We had solid results in the Salt segment that reflect the robust earnings potential of that business, while we continued to see sequential improvements in realized price, adjusted EBITDA per ton, and adjusted EBITDA margin in the Plant Nutrition segment.”
He also acknowledged the delay in sharing these positive results, attributing it to issues related to historical accounting matters. “It’s disappointing that we have been delayed in sharing the positive performance of the core businesses with the market due to issues surrounding certain historical accounting matters. It is important for the market to know that the core Salt and Plant Nutrition business are performing well, and that we are also focused on positioning the company for better performance in the future.”
In addition to the strong third-quarter performance, Compass Minerals also provided updates on several key aspects of its operations. The company stated that it continues to evaluate various options for the future of Fortress North America. Furthermore, Compass Minerals ended the quarter with robust liquidity, totaling $220.8 million, comprising $12.8 million in cash and cash equivalents and $208.0 million available under its $375 million revolving credit facility.
The company is actively engaged with its current and predecessor auditors to correct past accounting errors and restate the affected financial statements. This process involves additional audit procedures covering fiscal years 2021 through 2023, extending the timeline for completing the restatements.
Looking ahead, Compass Minerals has revised its FY24 revenue outlook. The Salt segment forecast has been adjusted from $900 million – $920 million to $900 million – $910 million, while the Plant Nutrition segment forecast has been revised from $170 million – $205 million to $175 million – $185 million.
The positive news sent CMP shares soaring, with the stock price up 24.2% at $11.44 at the last check on Tuesday. This significant jump reflects investor confidence in the company’s strong performance and future prospects.
