Domtar Announces $59 Million Net Earnings for Q2 2012
Monday, July 30, 2012
Press release from the issuing company
Domtar Corporation today reported net earnings of $59 million ($1.61 per share) for the second quarter of 2012 compared to net earnings of $28 million ($0.76 per share) for the first quarter of 2012 and net earnings of $54 million ($1.30 per share) for the second quarter of 2011. Sales for the second quarter of 2012 amounted to $1.4 billion.
Excluding items listed below, the Company had earnings before items1 of $59 million ($1.61 per share) for the second quarter of 2012 compared to earnings before items1 of$61 million ($1.65 per share) for the first quarter of 2012 and earnings before items1 of $98 million ($2.37 per share) for the second quarter of 2011.
Second quarter 2012 items:
First quarter 2012 items:
Second quarter 2011 items:
"We had a good operating performance in the quarter despite costs associated with lack-of-order downtime," said John D. Williams, President and CEO. "So far this year, our shipments have declined due to softness in market demand for paper but our average pricing and margins are holding up well. The ramp-up of the Appleton paper supply agreement and the conversion of the Marlboro, South Carolina mill to lightweight specialty and packaging grades will remove high volume paper capacity and help reduce the amount of potential downtime for the back half of 2012."
Commenting on the Personal Care segment, Mr. Williams added, "Our Personal Care business continues its growth, reaching annualized sales of over $425 million in the second quarter. The addition of EAM Corporation will provide a long term research capability to help further differentiate our offering and grow the business."
The decrease in operating income before items1 in the second quarter of 2012 was the result of lower shipments for papers and pulp and higher costs for both planned maintenance and for lack-of-order downtime in papers. These factors were partially offset by higher selling prices for paper and pulp, lower SG&A costs and the inclusion of Attends Europe for a full quarter.
When compared to the first quarter of 2012, paper shipments decreased 5.9% and pulp shipments decreased 5.4%. Paper deliveries of Ariva decreased 9% when compared to the first quarter of 2012. The shipments-to-production ratio for paper was 98% in the second quarter of 2012, compared to 100% in the first quarter of 2012. Lack-of-order downtime and machine slowdowns in papers totaled 23,000 tons. Paper inventories increased by 13,000 tons while pulp inventories increased by 15,000 metric tons as at the end of June, compared to March levels.
LIQUIDITY AND CAPITAL
EARNINGS CONFERENCE CALL
The Company will release its third quarter 2012 earnings on October 26, 2012 before markets open, followed by a conference call at 11:00 a.m. (ET) to discuss results. The date is tentative and will be confirmed approximately three weeks prior to the official earnings release date.
1 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in the appendix.
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