Mosaic No Guidance But Positive Executive Comments

Mosaic (MOS) reported its Q1 numbers and really stuck its neck out with this comment hidden in its press release.

“Mosaic is not providing financial guidance on potash sales volumes or MOP selling price until market conditions normalize.”

All this in the context of a revenue drop from approximately $4.3 to $1.5 Billion. Mosaic is in a commodities business. Implicitly to operate you must have a view on prices.

Yet they feel comfortable with this quote "Phosphate fundamentals have improved. The potash market is evolving and we expect strong demand in calendar year 2010 for both nutrients," said Jim Prokopanko, Mosaic's President and Chief Executive Officer. "Our long-term outlook for crop nutrients remains positive and we continue to execute our strategic plans designed to drive strong cash flow and shareholder value."

The stock popped nicely for those who understood the doublespeak.

Bank of America Emergency CEO?

Bank of America (BAC) is considering an emergency CEO given that Ken Lewis may suddenly get real busy with legal issues. Emergency CEO’s do not work. Look at the AIG experience. Congress just whips them for stuff they did not do. What you really want is a CEO who demands access to the corporate jet. Then you know you have the right gunslinger.

The board is still not on top of the leadership issue much less where do we go from here.

Constellation Brands -- Foreign Exchange Disaster

Constellation Brands (STZ) which bills itself as the world’s largest wine company headlines some positive results such as debt reduction of $155 million for the quarter and cost reduction benefits. But revenues are down. So consumers are not drinking away the recession. In fact they are cutting back.

The company is highly leveraged so they have to squeeze out very significant debt service payments. This is what concerns me. Sales are down and accounts receivable are up. This is a classic finance 101 trouble sign. Management is not speaking to this issue.

Perhaps more importantly is the question of foreign exchange. Spirits in general and wine in particular are a global business. If you believe that US currency will depreciate vs other world currencies how will this company fare. Management provides you geographically segmented data on sales but not on costs. So if you depend on grapes from Australia or Argentina and wine sales in Manhattan do you have an iceberg straight ahead?

Bank of America - Ken Lewis Orbituary

Bank of America (BAC) is without its President today. Normally not having someone in that chair is a serious problem. But Ken Lewis has been so vexed with regulatory issues one can say that he has not been on the job for quite some time. Many will say that when he was on the job he was not creating shareholder wealth.

They say he made the decision on his own and was not pushed. He wore a beard one day when coming back from vacation. Beards are not last minute decisions. The writing was on the wall when he was removed from his seat as Chairman of the Board. It was clear to most what that really meant. Except to Ken Lewis.

There were subtle but strong pressures. When the board of directors asks you how much longer you are planning to stay that is essentially a termination interview with interruptions. The board bears ultimate responsibility. The board is being recast with new individuals who are not tied to the sins of yesterday.

The big signal to investors is to be concerned about large companies where the same individual is both chairman directly representing the shareholders while at the same time being the President and CEO directly doing the work that shareholders have hired you to do.