* Fiscal Q4 EPS $1.19 vs Street forecast $1.15
* Revenue dips 1 percent to $2.82 billion
* Quarterly dividend doubled to 25 cents
* Shares up 4.2 percent in midday trading
By Ernest Scheyder
July 17 (Reuters) - The drought devastating the U.S. corn crop likely won't dent fertilizer sales, Mosaic Co said on Tuesday as it reported better-than-expected quarterly results.
The results and bullish forecast helped push the company's stock up 4.2 percent in midday trading.
Drought is affecting about 55 percent of the contiguous United States, which accounts for half of the world's corn exports. The bad weather comes just as corn should be pollinating, and the lack of moisture harms final yields.
Just this week, U.S. Department of Agriculture slashed its weekly corn crop condition rating by the biggest amount in nearly a decade.
The drought is not good news for Mosaic, as farmers likely will apply less potash and phosphate -- the company's main products -- in August and September as corn plants die.
However, Mosaic's global reach should help offset any demand dip from the drought, and the company expects another "good year" for its fiscal year that began June 1, Chief Executive Jim Prokopanko said.
While the drought likely is one farmers will "tell their grandkids about," the dip in production this year will force them to plant more next year, and as a consequence apply more fertilizer, he said.
"It's horrible for these farmers to be losing their crop, but that means for the next year, probably the next two years, they're going to have to have their foot to the accelerator and produce more grain," Prokopanko said in an interview.
Mosaic posted net income of $507.3 million, or $1.19 per share, for its fiscal fourth quarter, down from $649.2 million, or $1.45 per share, a year earlier.
Analysts expected $1.15 per share, according to Thomson Reuters I/B/E/S.
Revenue fell 1 percent to $2.82 billion but beat the $2.55 billion analysts had expected.
Prices for phosphate, the second-most important fertilizer for farmers and a key Mosaic product, fell to $494 per metric ton in the quarter from $574 a year earlier.
Prices for potash rose to $455 per metric ton from $404 a year earlier.
The company raised its annual dividend to $1 from 50 cents. The decision has not been made yet as to whether the dividend will be paid quarterly or annually, Prokopanko said. It was Mosaic's second dividend increase this year.
"We were emboldened by a strong outlook we see for the next five to 10 years ahead for the whole world food and global nutrition story," Prokopanko said. "We felt very confident to issue a dividend that even under the most dire of forecasts we're going to be able to maintain."
Mosaic expects to spend $1.5 billion to $1.8 billion in its fiscal year 2013 by expanding three Canadian potash mines.
The company is also studying whether to build a nitrogen plant on the U.S. Gulf Coast to produce ammonia, a key ingredient in phosphate fertilizer.
Mosaic currently makes 500,000 metric tons per year of ammonia, and buys an additional 1 million metric tons. In-house production of all its ammonia needs would be a boon to annual earnings, which drop by $78 million each time ammonia prices increase by $25 per tonne.
Prokopanko said on Tuesday that currently there are no "insurmountable hurdles" to building the nitrogen plant, and that once construction begins it should take about two or three years until the plant is fully operational.
"We are going through the permitting process and various engineering plans are being considered," he said. "At this point it looks favorable."