PORTLAND, Ore., Oct. 10 -- Willamette Industries today reported financial results for the third quarter ended September 30, 2001.
Net earnings for the 2001 third quarter were $65.8 million, or $0.60 per diluted share, exceeding First Call analysts' estimates of $0.52 by 15%. These earnings include non-recurring charges of $0.03 related to the start-up of the eastern particleboard plant and closure costs for shutting down a press line in Bend, OR and $0.04 per share charge associated with the defense of the unsolicited hostile takeover attempt by Weyerhaeuser. Net of these non-recurring charges, diluted EPS would be $0.67 per share.
Net earnings for the first nine months of 2001 were $203.2, or $1.85 per diluted share. Sales for the third quarter 2001 were $1.1 billion and year-to-date 2001 were $3.4 billion.
Duane McDougall, President and CEO, said, "Despite a tough market environment we believe our performance measures will again put us at or near the top of the industry.''
McDougall said brown paper earnings increased $12 million from the second quarter as energy costs lightened and mills continued to operate extremely well.
Willamette experienced a modest decline in corrugated sales volumes as compared to third quarter 2000. Corrugated pricing held up relatively well despite the economic slump. Because more than 60% of Willamette's corrugated business is in food, beverage and consumer staples, the company may not experience as significant an impact from the sluggish economy as might be expected.
In white paper, McDougall said the company continued to gain market share as combined business forms and cut sheet volume increased slightly from last year while the industry experienced a decline. Inventories continue to remain on the low side. Earnings were down primarily as a result of industry pricing pressures.
As expected, third quarter 2001 results from Willamette's building materials business declined from the second quarter due to price deterioration in most product lines, increased log costs due to decreased harvest levels, and startup expenses associated with the eastern particleboard plant.
"The tragic events in New York and Washington, D.C. have created a great deal of economic uncertainty,'' said McDougall.
"As I look at the fourth quarter of 2001, it is too early to determine the full impact of the events of September 11 on the economy,'' McDougall said. "The fourth quarter is seasonably a slow time and this year will be even more challenging due to the current economic downtrends. However, we believe Willamette is well positioned for the long term. Willamette's distinguishing characteristics, our culture, values, structure and investments lead us to believe we will continue to outperform the industry in profitability under most key financial metrics and deliver significant value to our shareholders.''
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