Terra 3Q earnings more than triple

Terra Industries Inc. net income for the third quarter ending Sept. 30, 2008 more than tripled to $171.4 million ($1.64 per diluted share) on sales of $788.3 million, versus the year-ago $54.4 million ($.51 per share) and $577.9 million, respectively.

“We are pleased with Terra’s third quarter performance,” said Terra President and CEO Mike Bennett. “We also expect strong fourth quarter performance, in part because we have secured margins on substantial volumes of forward sales against which we have locked in natural gas purchases.

“As we look ahead to 2009,” Bennett continued, “industry projections indicate an increase in nitrogen fertilizer demand driven by increased demand for grain. It remains to be seen what effect the broad economic slowdown will have on our industrial customers. To date, credit issues have not had a notable impact on our customer base.

“While current global urea prices are sharply lower than they were in the summer, domestic natural gas prices have also dropped dramatically, continuing to support favorable projected margins.”

During the third quarter, Terra restarted its Donaldsonville, La., ammonia plant. Due to mechanical and weather-related issues, the plant operated intermittently in August and through mid-September. As a result, the plant incurred start-up costs of $7.5 million. These are included in cost of sales for the 2008 third quarter. The plant has operated well since late September.

Terra told analysts that it had a successful turnaround of its Port Neal, Iowa, plant in August. In 2009, it expects to undergo turnarounds at Yazoo City, Woodward, and one half of the Verdigris plant. It will also have a turnaround of the Courtright, Ont., urea plant.

Nine-month net income was $476.3 million ($4.54 per share) on sales of $2.2 billion, compared to the year-ago $132.2 million ($1.24 per share) and $1.77 billion.

* Sales volumes in thousand st; prices are average unit; natural gas is mmbtu.