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Dec 31, 2022
LSB Industries Q4 2022 Earnings Report
LSB Industries reported record operating results.
Key Takeaways
LSB Industries reported strong top and bottom-line growth for the fourth quarter and full year 2022, driven by strategic commercial initiatives and favorable positioning across end markets. The company generated significant cash flow, enhanced liquidity, and progressed on its multi-year growth plan.
Net sales increased to $234 million compared to $190 million in Q4 2021.
Adjusted EPS reached $0.90, up from $0.72 in Q4 2021.
The company repurchased approximately 5.6 million shares during the fourth quarter.
Total liquidity stood at approximately $460 million as of December 31, 2022.
LSB Industries
LSB Industries
Forward Guidance
LSB Industries anticipates another year of strong profitability and cash flow, with plans to make additional investments in facilities and review options for debt reduction or stock repurchase. The company also expects to formalize plans for debottlenecking projects and take steps in its blue and green ammonia projects.
Positive Outlook
- Selling prices for products remain above historical averages.
- An increase in corn and wheat acres planted this spring is expected.
- Nitrogen pricing remains significantly above 10-year averages.
- Demand remains generally stable with domestic end-use markets continuing to be stronger than those in Europe and Asia.
- Some degree of improvement in auto production could unfold during 2023, which would be beneficial to demand for nitric acid.
Challenges Ahead
- Nitrogen fertilizer prices moderated in recent months, largely reflecting a decline in European production costs coupled with the seasonal pause in demand.
- Natural gas prices in Europe have dropped in recent months due to a reduction in demand.
- Inflation and other economic pressures are impacting some parts of the chemical manufacturing industry.
- U.S. corn stock/use ratios are at their lowest levels in a decade due to dry conditions in South America, the Western U.S. and parts of Europe during 2022.
- European operators remain the marginal producers, with production costs substantially higher than those in the U.S.