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Hurricane Harvey Hurt United States Lime & Minerals' Third-Quarter Results

By Matthew DiLallo - Oct 27, 2017 at 10:07AM

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The storm affected demand for the Dallas-based company's lime and limestone products.

U.S. Lime & Minerals' (USLM 0.52%) financial results took a step backward in the third quarter as construction companies' demand for its products waned due mainly to the impact from Hurricane Harvey. That more than offset the continued rebound in demand from oil and gas customers as drilling activities in the U.S. improve.

U.S. Lime & Minerals results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Change


$36.9 million

$38.7 million


Net income

$5.7 million

$6.1 million


Earnings per share




Data source: U.S. Lime & Minerals.

A contruction site flooded by Hurricane Harvey.

The aftermath of Hurricane Harvey. Image source: Getty Images.

What happened with U.S. Lime this quarter? 

Harvey hit demand:

  • Revenue from the company's lime and limestone operations fell 4.4% versus last year's third quarter to $36.4 million as a result of lower sales volumes to construction customers due to the impact Hurricane Harvey had on construction activities in Texas. Sales prices, meanwhile, were roughly flat with last year. The decline in sales volumes caused gross profit to fall from $10.5 million to $9.5 million.
  • Revenue from the company's natural gas interests fell 8.7% to $506,000 due to a 12.2% drop in production, which more than offset a 3.7% increase in gas prices. That said, gross profit from the natural gas segment increased from $66,000 to $76,000.
  • The decline in sales from those segments pulled companywide earnings lower. 

What management had to say 

CEO Timothy Byrne commented on the company's third-quarter results: "We are pleased with the continuing rebound in demand for our lime products from our oil and gas services customers during the third quarter 2017. We are grateful that our employees impacted by Hurricane Harvey are all safe and our facilities suffered only minor damages, but demand from certain of our construction customers during the third quarter was adversely impacted by the storm."

Hurricane Harvey hit Texas hard, washing out demand for construction products in the state during the quarter. For example, Dallas-based cement-maker Eagle Materials noted that hurricane-related flooding in Texas impacted cement shipments. Due to that, and drenched Midwestern markets during the quarter, sales volumes fell 5% after stripping out the impact of a recent acquisition.

Looking forward 

However, while Harvey hurt demand in the third quarter, the storm could become a tailwind for construction demand in the coming months. Eagle Materials' CEO Dave Powers noted that his company "is poised to serve our customers' additional needs as they meet the challenges of rebuilding." Likewise, demand for U.S. Lime's products could increase in the coming quarters as rebuilding activities ramp up. Add to that the overall improvement in drilling activities in the U.S., and it seems like U.S. Lime's results could rebound quickly. 

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