Terra Industries Inc. Reports Third Quarter Results.S U M M A R Y Q3/06 vs. Q3/05 results: * Revenues down $21 million, or 4%. * Cost of sales down $24 million, or 5%, mainly due to moderating North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. natural gas unit costs. * Income from operations down $3 million, or 8%. Outlook: * Nitrogen prices stabilized during the third quarter and should exhibit normal seasonal increases through the 2007 planting season. * Low projected grain inventories should encourage increased planted acres of corn and wheat, which should lead to increased demand for nitrogen. SIOUX CITY, Iowa <noinclude></noinclude> Sioux City (IPA: [su: 'sɪti]) is a city located in northwest Iowa in the United States. As of the 2000 census, the city had a total population of 85,013. -- Terra Industries Inc. (NYSE NYSE See: New York Stock Exchange :TRA TRA Training TRA Transfer TRA Transition TRA Tennessee Regulatory Authority TRA Telecommunications Regulatory Authority (Oman) TRA Tax Reform Act (1976, 1984, or 1986) TRA Teachers Retirement Association ) announced today net income available to common shareholders of $9.1 million, or $.10 per common share, on revenues of $464.8 million for the quarter ended Sept. 30, 2006. Net income available to common shareholders for the 2005 third quarter was $9.8 million, or $.10 per share, on revenues of $485.7 million. Terra reported operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $29.4 million for the 2006 third quarter, compared to operating income of $32.0 million in the 2005 third quarter. The 2006 third quarter earnings benefited from $11.6 million of gross profits pursuant to the Beaumont facility's methanol methanol, methyl alcohol, or wood alcohol, CH3OH, a colorless, flammable liquid that is miscible with water in all proportions. Methanol is a monohydric alcohol. It melts at −97. production contract, which is payable when methanol margins achieve specified levels. During the 2005 third quarter, that same contract resulted in a $3.3 million charge. These gains were reduced $8.2 million for third quarter 2006 repairs, start-up costs and other items associated with the June explosion at the Billingham ammonia ammonia, chemical compound, NH3, colorless gas that is about one half as dense as air at ordinary temperatures and pressures. It has a characteristic pungent, penetrating odor. plant. Cash balances totaled $122.2 million at Sept. 30, 2006. During the 2006 third quarter, Terra repurchased 630,000 of its common shares for $4.4 million. Since announcing its authorization to repurchase up to 9.5 million of its outstanding common shares by June 30, 2008, Terra has repurchased 2.7 million shares. Year-to-date 2006, Terra posted a net loss to common shareholders of $11.2 million, or $.12 per share, on revenues of $1.4 billion. Net income available to common shareholders for the comparable 2005 period was $33.4 million, or $.36 per share, on revenues of $1.4 billion. Analysis of third quarter results The $20.9 million decrease in revenues from the 2005 to 2006 third quarter was due to a $20.0 million decrease in ammonia, UAN UAN - User Action Notation. A notation from VPI for representation of activity in a graphical user interface. [H. Hartson et al, ACM Trans on Info Sys, July 1990]. and urea selling prices and a $27.6 million decrease in UAN, AN, urea and methanol sales volumes. These shortfalls were partially offset by the $14.9 million increase to gross profits earned on the Beaumont facility's methanol production contract and higher reimbursements for freight and services. Cost of sales for the 2006 third quarter decreased by $24.1 million, or 5 percent, over the 2005 third quarter, mainly due to lower sales volumes and lower natural gas costs that more than offset cost increases associated with the resumption of Billingham ammonia production Because of its many uses, ammonia is one of the most highly-produced inorganic chemicals. There are literally dozens of large-scale ammonia production plants worldwide. The worldwide production in 2004 was 109,000,000 metric tons.[1] China produced 28. . During the 2006 third quarter, Terra's manufacturing plants operated at about 87 percent of capacity, compared to about 65 and 85 percent in the 2006 first and second quarters, respectively. Analysis of year-to-date results The $38 million year-to-date revenue decline from 2005 to 2006 was mainly due to lower sales volumes, partially offset by higher nitrogen products selling prices. Sales volumes were affected by lower overall fertilizer consumption. The $105 million year-to-date operating income decline from 2005 to 2006 was mainly due to $134 million of cost increases primarily related to higher natural gas and purchased product values as well as curtailed production rates. Lower sales volumes reduced year-to-date gross profits $23 million. These factors were partly offset by a $60 million increase to selling prices. Forward natural gas position Terra's forward purchase contracts at Sept. 30, 2006, fixed prices for about 14 percent of its next 12 months' natural gas needs at about $18.1 million above the published forward market prices at that date. The majority of these forward purchase contracts support nitrogen sales commitments. CEO's remarks "2006 has been challenging for nitrogen producers due to high natural gas costs in the first quarter, and a period of adjustment and transition in the second quarter," said Terra President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Michael Bennett
Michael Bennett (April 8, 1943 - July 2, 1987) was a Tony Award-winning American musical theater director, writer, choreographer, and dancer. . "During the third quarter we continued to experience stabilizing conditions in nitrogen products and energy markets. As we move into the upcoming crop year, strong grain markets bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for improved nitrogen demand. This, coupled with more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. energy markets, should lead to improved financial and operating performance for Terra through the fourth quarter and into next year." Conference call details Terra management will conduct a conference call to discuss these third quarter results this afternoon at 3:00 ET. A live webcast of the conference call will be available from Terra's website at www.terraindustries.com, and will be archived for playback for three months. About Terra Terra Industries Inc., with 2005 revenues of $1.9 billion, is a leading international producer of nitrogen products. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about Terra Industries Inc.'s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in Terra Industries Inc.'s most recent report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Terra Industries Inc.'s other documents on file with the Securities and Exchange Commission. Terra Industries Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Note: Terra Industries' news announcements are also available on its website, www.terraindustries.com. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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