U.S. Silica posts smaller-than-expected loss as industrial push pays off
(Adds shares, CEO comment, forecast)
Feb 19 (Reuters) - U.S. Silica Holdings Inc
reported a smaller-than-expected quarterly loss on Tuesday,
driven by increased supply of sand to industries such as glass
and construction as its main frac sand business slows.
The company's shares rose as much as 8 percent as sales at
its industrial and specialty products unit more than doubled to
$113.8 million in the fourth quarter.
That more than made up for a 20 percent drop in revenue to
$243.5 million from its traditional business of supplying sand
for use in fracking, as oil producers hold back on well
"We expect to continue with our strategic plan to
substantially grow our industrial segment," Chief Executive
Officer Bryan Shinn said on a conference call with analysts.
In 2019, the company expects 75 percent of profitability to
be driven by its industrials unit and Sandbox, which provides
transportation and storage facilities for proppant used in
fracking in the oil and gas industry.
In December, the company also said it would increase prices
of silica sand products from the unit between 2 percent and 9
percent. The rise in prices, applied to shipments that started
from Jan. 1, are part of the efforts by the company to offset
production and investment costs.
Oil and gas sand proppant sales were hurt by pricing
pressure from a combination of low demand and additional local
sand capacity coming on line in the Permian, the company said.
The company forecast sand volumes to be kind of "flattish"
compared with the fourth quarter.
Excluding items, the miner recorded a loss of 4 cents per
share, smaller than the average analyst estimate of a loss of 7
cents, according to data from Refinitiv.
Total sales fell about 1 percent to $357.4 million.
(Reporting by Shanti S Nair and Arundhati Sarkar in Bengaluru;
Editing by Sriraj Kalluvila and Maju Samuel)
First Published: 2019-02-19 13:09:07
Updated 2019-02-19 18:45:48
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.