Georgia-Pacific Group Reports First Quarter Results
Press release from the issuing company
ATLANTA, Georgia. April 19, 2001 -- Georgia-Pacific Group (NYSE:GP) today reported a net loss of $137 million (61 cents diluted loss per share) for the first quarter 2001, which includes a one-time, pre-tax charge of $82 million ($52 million after tax, or 23 cents diluted loss per share) related to the closure of the Bellingham, Wash., pulp and lignin operation. A year ago, first quarter net income was $194 million ($1.11 diluted earnings per share).
In addition, Georgia-Pacific Group recorded an extraordinary loss on early retirement of debt, net of taxes, of $12 million (5 cents diluted loss per share) and income, net of taxes, of $11 million (4 cents diluted earnings per share) for the cumulative effect of a change in accounting for derivative instruments and hedging activity.
The net loss before the one-time charge, extraordinary loss and accounting change was $84 million (37 cents diluted loss per share).
First quarter 2001 results were significantly impacted by continuing weak market conditions for wood products and higher energy costs, although the group's consumer products segment achieved encouraging operating results.
Sales for Georgia-Pacific Group in the first quarter 2001 were $6.3 billion compared with $5.5 billion in first quarter 2000. Debt for Georgia-Pacific Group at the end of the quarter was $14.8 billion compared with $15.2 billion at year-end 2000.
Georgia-Pacific's consumer products segment, which includes the former Fort James Corp. assets acquired late last year, recorded first quarter 2001 operating profits of $183 million, excluding the one-time charge for the Bellingham closure, versus $52 million a year ago. The consumer products segment is comprised of the company's consumer and away-from-home tissue businesses in North America and Europe and its Dixie cups, plates and cutlery business.
"We are disappointed but not surprised by our first quarter results given the difficult economic climate that has prevailed since late last year," said A.D. "Pete" Correll, chairman and chief executive officer.
"Looking ahead, we see some indications of improvement in our structural panels and lumber businesses as housing and remodeling activity enter their strong season, but we remain concerned about the potential length and severity of the economic downturn and its effect on our building products results.
"Given the global economic outlook, it is likely that our containerboard and packaging, and pulp and paper businesses will continue facing soft market conditions for the balance of the year. We remain committed to the strategy of manufacturing to demand and not building inventories.
"We are very optimistic about the progress we are making in our consumer products business and are convinced that its benefits to the bottom line will increase in the months ahead as we achieve synergies in manufacturing, sales and marketing between Georgia-Pacific and the former Fort James operations. ct an increase in energy costs and a drop in shipments of containerboard resulting from the economic slowdown
The evolution of the economic situation will raise several challenges in all of our segments. Furthermore, in the Wood segment, the end of the Canada-U.S. softwood lumber agreement creates a climate of uncertainty. To counter the downward pressure on market prices and demand, Domtar will continue to consolidate its links with its customers in order to sustain shipment levels, and will carry on with its Quality and Productivity Improvement Program to ensure a superior return for its shareholders.
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