LSB Industries Inc. said it had additional unplanned downtime at one of its chemical plants in May and June that will affect its second-quarter results when they are released in early August.
The Oklahoma City-based company, which also has a climate control manufacturing division, said its quarterly earnings will come in below its original estimates. But better results at its climate control division and expected business interruption insurance payments later in the year will make up for some of the lower revenues.
LSB said it lost ammonia production at its Pryor plant in May and June after shutting down to replace some bearings and couplings. The company said that downtime, along with other maintenance and repair costs, will drop second-quarter operating income to between $9 million to $12 million. LSB had $42.3 million in operating income in the second quarter of 2012.
The company said second-quarter chemical division results also were affected by a later start to the agricultural fertilizer season because of cooler weather and higher costs for natural gas. The Pryor plant has since restarted production.
LSB said it expects second-quarter earnings per share to be in the 20 cents to 30 cents range. It posted earnings per share of $1.11 in the second quarter of 2012.
“Despite the issues that depressed our second quarter profitability, we have made significant advances with the repair and upgrade of our facilities and are confident that, due to the efforts made by our dedicated operating management team, the mechanical reliability of our chemical business will be much improved in future quarters and years,” said Jack Golsen, LSB's chairman and CEO.
Golsen said a recovery in new construction is driving improved results at its climate control division.
LSB earlier this year recorded five months of planned and unplanned downtime at its Pryor and Cherokee, Ala., plants. Nitric acid capacity at its El Dorado, Ark., plant is at 80 percent of its May 2012 until a new nitric acid plant is complete in 2015.