Lsb Industries (LS3) Q3 2026 Earnings Report

The call was strongly positive, with significant year-over-year adjusted EBITDA growth, strong demand across both businesses, favorable nitrogen-market conditions, improved plant reliability, solid cash generation, and multiple initiatives expected to add earnings over time. The company also acknowledged geopolitical supply risks, higher SG&A, lower third-quarter volumes related to the turnaround, weather-related agricultural uncertainties, incomplete USDA funding for a later expansion phase, and an unresolved legal trial.

Management expects to favor AN until sometime in the first half of 2027, with supply issues resolving sort of towards the end of first half next year; the fourth-quarter order book is “70% or so sold,” with “significantly less sold” for the first quarter, while elevated European gas costs are expected to persist through the winter, supporting a constructive nitrogen market through at least spring 2027. Annual ammonia production could be 875,000 tons-900,000 tons a year with no turnarounds and full-out operation, including El Dorado at between 1,350 and 1,370 tons a day and higher than 1,370 in the winter, Pryor generally between 675 and 700 tons a day, and Cherokee at 520-530 on a daily rate basis. The company expects to add another $15 million of annual EBITDA improvement by the end of 2026, reach approximately $35 million in cumulative annual run rate improvements, capture another $15 million to $20 million of annual EBITDA improvement by the end of 2027, and generate between $25 million and $30 million of annual earnings from CCS when fully operational; the potential El Dorado ammonia expansion could add approximately 100,000 tons of annual ammonia production capacity and between $20 million and $25 million of incremental annual EBITDA, with FID sometime during the second quarter of 2027, total net project cost between $105 million and $120 million, and completion alongside the planned 2029 turnaround.