VANCOUVER – West Fraser Timber Co. Ltd. (TSX:WTF) has reported lower year-over-year earnings in the second quarter despite an increase in sales revenue.
The Vancouver-based softwood lumber producer says net income in the quarter was $74 million or 87 cents per share, compared with $109 million or $1.27 per share in the comparable 2013 period.
Revenue rose to $1.05 million from $900 million in the second quarter of 2013 and from $809 million in the first quarter of this year as increased shipments in its lumber operations were offset by lower prices.
Ex-items, earnings came in at $66 million or 77 cents per share in the second quarter, compared with adjusted earnings of $107 million of $1.25 per share in the year-earlier period.
The company said shipments of lumber increased sharply in the second quarter after the settlement of a 28-day strike at the Port of Vancouver in March, but that both SPF (spruce, pine, fir) and SYP (southern yellow pine) prices declined.
“As the strike-related lumber inventory backlog continues to clear and U.S. housing continues to gradually recover, lumber prices have stabilized and shown some improvement in early July,” the company said in announcing its results Wednesday after markets closed. “However, we expect them to remain fairly volatile.
Meanwhile, log costs are expected to trend higher in B.C. as competition for purchased wood increases but lumber productivity and cost reductions throughout the company’s sawmills are expected to continue to improve over the next few quarters, it said.
On the Toronto Stock Exchange, shares in West Fraser Timber closed up 99 cents or 1.97 per cent at $51.29 on Wednesday.