LSB Industries falls 11% as unplanned downtime at plant could reduce operating income
LSB Industries Inc. (AMEX:LXU) dropped by more than 11% today after the company announced after Tuesday’s closing that it will need to make more extensive repairs on its anhydrous ammonia chemical plant in Cherokee, Ala.
The plant experienced repeated plant downtime during the firm’s fiscal third quarter, which, in turn, reduced production and sales of urea ammonium nitrate fertilizer and to a lesser degree, certain industrial products.
The downtime was caused by the plant’s unexpected mechanical failure.
After the market closed Tuesday, Oklahoma City, Okla.-based LSB Industries said it would make more repairs during a planned maintenance event that is scheduled for approximately 21 days in October.
The plant is currently operating at slightly below-normal rates, however, additional downtime could occur until repairs are made during the plant turnaround.
Because of the issues with the plant, Cherokee has lost approximately 20 days of operation so far in the third quarter. The company predicts the unplanned downtime could reduce its chemical business’ operating income by $5 million to $6 million.
By mid-day, LSB is trading at $17.99, down $2.26 from Tuesday’s close. The stock has traded as low as $13.45 and as high as $28.85 during the past 52 weeks.
For detailed price information and news stories on LSB, click LXU.
