(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 completions.
“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