LSB Industries Inc. said increased volumes in major chemical markets helped boost earnings for that business segment for the second quarter ending June 30, 2010. LSB expects that market strength to continue for the rest of the year. Chemical operating income was $9.2 million on sales of $106.4 million, compared to the year-ago $6.2 million on sales of $69.9 million.
The chemical uptick comes despite start-up costs at its Pryor Chemical plant, which is currently undergoing repairs due to a fire (GM July 5, p. 1). LSB now expects those repairs to be complete toward the end of September. It said insurance will provide for replacement coverage relating to property damage with a $1 million deductible, and business interruption coverage for certain lost profits and extra expense with a 30-day waiting period and $250,000 deductible.
The company reported only limited anhydrous ammonia and UAN production and sales from Pryor before the fire. As a result, the company said it incurred losses of $2 million and $8 million for the quarter and six months, respectively. Second-quarter start-up expenses were $3.2 million, while six-month start-up expenses were $5.2 million.
Despite the positive second quarter, six-month chemical income was down at $11.1 million on sales of $181.2 million, versus the year-ago income of $18.8 million on sales of $144.4 million.
Company-wide, LSB reported second-quarter net income of $6 million ($.27 per share) on sales of $168.4 million, compared to the year-ago $8.7 million ($.38 per share) on sales of $138.6 million. Six-month net income was $7.7 million ($.35 per share) on sales of $298.8 million, versus the year-ago $20.5 million ($.89 per share) on sales of $288.8 million.