Despite some fall-off, Houston-based CARBO Ceramics Inc. Thursday said it continues to see strong ceramic proppant sales volumes in the active major shale plays such as the Eagle Ford, Permian and Bakken.

“One reason for this strength [in sales] is that several clients appear to be replacing lower-quality, lower-conductivity Chinese intermediate density ceramic (IDC) proppant with our high-quality, high-conductivity lightweight ceramic proppant,” said Gary Kolstad, CEO of CARBO, the world’s largest manufacturer of ceramic proppant used during fracking to enhance well productivity. CARBO has initiated a technical marketing campaign to explain the benefits of its ceramic proppant product for hydraulic fracturing to prospective customers.

The company’s net income for the third period fell to $23.9 million ($1.04 share), from $36.9 million for the same period a year ago. But CARBO beat the Street which had predicted per-share earnings of 93 cents for the period. As a result the company’s shares jumped more than 17% to $71.59 near the close on Thursday.

“While the third quarter had its share of challenges, we are pleased that global sales volumes of CARBO’s ceramic proppant volumes were only down 3% year over year” to 385 million pounds,” said Kolstad. “International sales volumes continued their positive trend [in the third quarter], with China leading our international growth year over year,” said Kolstad. “Given the excess supply of Chinese ceramic proppant in the market today, the growth we are witnessing in China is a testament to the CARBO brand name.” He said he expects inventories of Chinese IDC in the United States to decline in the coming months.

Construction of the company’s new distribution facility in South Texas will be completed during the four quarter. “Once completed, this large distribution facility will allow us to better serve the Eagle Ford.” CARBO also has purchased land in North Dakota and is expected to begin construction of a distribution facility there during the fourth quarter, with an anticipated completion date during the first half of 2013.

And now that it’s received an air quality permit from the state of Georgia, CARBO may begin production at a state-of-the-art manufacturing plant in Millen, GA, near the end of 2013, he said.

Kolstad said CARBO “has identified a new technique for the production of ceramic proppant. While still in a development phase, lab results indicate this technique can produce a ceramic proppant with increased strength and conductivity when compared to traditional ceramic proppants.”

He sees a mixed outlook for his company for the rest of the year. “Although challenges will likely continue in the fourth quarter, we expect the pressures on sales volumes and pricing to lessen over the coming quarters as inventories of Chinese IDC proppant in the United States appear to be declining.”