LSB Industries reported higher earnings for the third quarter of 2026, with net income more than doubling from a year earlier as sales rose modestly and adjusted EBITDA increased. The Oklahoma-based nitrogen products maker also highlighted record production at its three facilities and strong demand in its industrial and agricultural markets.
The quarter’s sales mix shifted sharply toward ammonium nitrate and nitric acid and away from urea ammonium nitrate, reflecting LSB’s decision to direct more production toward ammonium nitrate.
Key details
- Earnings improved: Net income was $16.3 million, up from $7.1 million in the third quarter of 2025. Diluted earnings per share rose to 22 cents from 10 cents.
- Adjusted EBITDA increased: The company reported adjusted EBITDA of $62.3 million, compared with $40.1 million a year earlier. Adjusted EBITDA is a non-GAAP measure.
- Revenue edged higher: Net sales were $158.6 million, versus $155.4 million in the prior-year quarter. LSB attributed the increase to higher selling prices and greater sales volumes of ammonium nitrate and nitric acid.
- Product sales reflected a shift in production:
- Ammonium nitrate and nitric acid sales rose 41% to $80.9 million from $57.5 million.
- Ammonia sales increased 22% to $45.2 million from $37.1 million.
- Urea ammonium nitrate sales fell 61% to $20.2 million from $51.4 million. LSB said strong industrial demand led it to shift some production from UAN to ammonium nitrate, reducing UAN sales volumes.
- Other sales increased to $12.3 million from $9.4 million.
- Production and facility performance: LSB said each of its three facilities set new monthly production records during the first nine months of 2026. It said it was on pace for record annual nitric acid and ammonium nitrate solution production, following two major turnarounds completed this year.
- Liquidity and debt: At September 30, LSB had approximately $203.5 million in cash, cash equivalents and short-term investments, and total debt of $442.2 million. That leaves debt about $238.7 million above those liquid resources.
- Industrial market conditions: LSB said ammonium nitrate demand remained strong, supported by mining investment and spending on infrastructure, data centers, power generation and electrification. It also pointed to favorable supply-and-demand conditions for ammonium nitrate, including disrupted industry supply.
- Nitrogen-market backdrop: The company said global ammonia prices remained above historical averages, though below first-half highs, while constrained global urea supplies supported third-quarter pricing and higher UAN prices. It cited high European natural-gas costs and continuing geopolitical disruptions to nitrogen production and transportation.
- Agricultural demand outlook: LSB expects fertilizer demand to be supported by the U.S. Department of Agriculture’s projection of about 96.8 million planted corn acres for the 2026/27 marketing season and global corn ending stocks at their lowest level in more than a decade. The company expects robust nitrogen demand during the fall 2026 and spring 2027 application seasons.
- Management’s view: Chief Executive Mark Behrman said strong customer demand and improved production following the turnarounds position the company to continue working toward higher, more consistent earnings and cash flow.
- Investor call: LSB scheduled a webcast for October 29 at 10 a.m. Eastern time to discuss the results.
What changes for investors
The quarter combined a relatively small increase in sales with substantially higher net income and adjusted EBITDA. The product mix changed materially: ammonium nitrate and nitric acid sales grew, while UAN sales declined as LSB redirected production toward ammonium nitrate. The company also reported significantly more debt than cash and short-term investments at quarter-end.