Key Highlights

  • Diluted EPS of USD 0.22 more than doubled from USD 0.10 and topped the USD 0.14 consensus estimate.
  • Net sales of USD 158.6 million rose 2.0% from a year earlier but trailed the USD 160.2 million estimate.
  • Adjusted EBITDA climbed 55% to USD 62.3 million, while gross profit reached USD 43.1 million versus USD 25.5 million.
  • Cash and short-term investments totaled USD 203.5 million against total debt of USD 442.2 million at quarter end.

LSB Industries, Inc. (NYSE:LXU) reported third-quarter 2026 diluted earnings per share of USD 0.22, up from USD 0.10 a year earlier and above a consensus estimate of USD 0.14. Net sales were USD 158.6 million compared with USD 155.4 million in the prior-year quarter, which fell short of a consensus estimate of USD 160.2 million. Net income rose to USD 16.3 million from USD 7.1 million.

Higher selling prices and stronger ammonium nitrate (AN) and nitric acid volumes drove the sales comparison. Management said strong industrial demand led it to move some production from urea ammonium nitrate (UAN) to AN, and the planned turnaround at the Pryor facility, completed early in the quarter, also trimmed ammonia and UAN volumes. Adjusted EBITDA rose to USD 62.3 million from USD 40.1 million.

Product Mix and Cost Structure

AN and nitric acid sales grew 41% to USD 80.9 million on volumes up 23% to 196,477 short tons and a netback price up 19% to USD 365 per ton. Ammonia sales rose 22% to USD 45.2 million, with the netback price up 32% to USD 528 per ton against a 7% volume decline. UAN sales fell 61% to USD 20.2 million as volumes dropped 59%.

Gross profit increased to USD 43.1 million from USD 25.5 million, as cost of sales declined to USD 115.5 million from USD 129.9 million. Natural gas averaged USD 2.93 per MMBtu in cost of materials, down 5%. Selling, general and administrative expense rose to USD 14.8 million from USD 10.3 million, and turnaround costs of USD 6.3 million were excluded from adjusted EBITDA. CEO Mark Behrman said each of the three plants set monthly production records during the first nine months.

Market Backdrop and Carbon Capture Project

The company described industrial demand for AN as strong, supported by mining investment and construction tied to data centers, power generation and electrification. It noted that global nitrogen supply remains disrupted, with ammonia prices above historical averages but lower than first-half highs, and said fall applications support fourth-quarter demand. The release cites USDA acreage of about 96.8 million corn acres for the 2026/27 marketing season.

At El Dorado, the carbon capture and sequestration project awaits the EPA's Class VI permit. The agency's permit tracker points to an operational date in the second half of 2027, though the company believes an earlier date is possible. The project targets 400,000 to 500,000 metric tons of CO2 captured per year and, at the current USD 85 per metric ton 45Q credit, the company estimates USD 25 million to USD 30 million of annual earnings once fully operational.

Datapoints Worth Following

Four items stand out. The Class VI permit timing is the first, with the tracker showing the second half of 2027. The second is product mix, as UAN volumes of 55,510 tons compare with 134,634 tons a year earlier while AN and nitric acid volumes rose. The third is the balance sheet: debt of USD 442.2 million against USD 203.5 million of cash and short-term investments. The fourth is the Tampa ammonia benchmark, which averaged USD 622 per ton, up 27%, against a NOLA UAN benchmark of USD 330, down 2%. No numerical earnings guidance was included in the release.