LSB Industries Stock: Earnings Plummet on Soaring Gas Costs

LSB Industries faced a significant setback on July 30, 2025, as earnings per share fell drastically to $0.04, well below both the previous year’s $0.13 and analyst expectations of $0.15. This disappointing performance triggered an immediate 11% stock price decline to $7.72. Despite a 6% increase in sales volumes, particularly in UAN and ammonium nitrate products, and revenue growth from $140 million to $151 million, profits were severely impacted by escalating natural gas expenses. While higher selling prices boosted adjusted EBITDA by $8 million, gas costs eliminated $15 million in potential profits, causing adjusted EBITDA to contract from $42 million to $38 million and the EBITDA margin to shrink from 30% to 25%. The company managed to reduce debt by $32 million during the quarter, though liquidity decreased substantially from $216 million to $125 million year-over-year, and operating cash flow nearly halved from $41 million to $18 million.

El Dorado Project Offers Future Promise

The company’s planned carbon capture project at El Dorado represents a potential turning point. Scheduled to begin operations in late 2026, the facility aims to produce up to 380,000 tons of ammonia annually using climate-friendly carbon capture technology. Freeport Minerals has already committed to purchasing 150,000 tons. Meanwhile, LSB Industries continues working to mitigate natural gas price volatility by increasing cost-plus based contracts, which now constitute 30% of agreements with a year-end target of 35%. The stock currently trades significantly below its 52-week high of $10.40, with future performance largely dependent on natural gas price developments.