Atlanta, GA, Apr. 29--Forest and consumer products company Georgia-Pacific Corp. on Thursday reported a first-quarter profit, reversing a year-ago loss, as prices for lumber and structural panels surged.
The company said net income was $147 million, or 57 cents a share, compared with a loss of $30 million, or 12 cents a share, a year earlier.
Excluding one-time items, the company reported earnings of 63 cents a share. On that basis, analysts' average forecast was 60 cents a share, according to Reuters Research, a unit of Reuters Group Plc.
Sales in the quarter rose to $5.22 billion from $4.44 billion a year earlier.
Georgia-Pacific, the largest U.S. producer of structural panels, said it expects to deliver even stronger second-quarter results. It expects its building products unit to stay strong and sees improving conditions in its consumer products, packaging and bleached paper businesses.
The building products manufacturing segment recorded first quarter 2004 operating profit of $263 million versus an operating loss of $17 million in the first quarter 2003. Included in the first quarter 2004 results were $2 million in employee severance costs at the Gloster, Miss., and Russellville, S.C., plywood facilities. In the first quarter 2003, the company closed a particleboard facility at Oxford, Miss., and a sawmill at Wakefield, Va., resulting in total pretax charges of approximately $7 million.
"Following a strong fourth quarter 2003 performance, our building products manufacturing business achieved record first quarter operating profits this year," A.D. "Pete" Correll, Georgia-Pacific chairman and chief executive officer said. "Demand for building products remained very strong, especially for the first quarter. Year over year, plywood prices were up 52 percent, oriented strand board prices improved 115 percent and softwood lumber prices rose more than 12 percent. Shipments of these products were higher as well. The record pace of housing starts and strong sales of existing homes, combined with favorable winter weather, continued to fuel this remarkable recovery in our building products manufacturing business. We are not seeing any evidence of inventory building among dealers and distributors.
"In addition, we remain very pleased with the growth in our specialty building products, such as the Dens line of gypsum panels, sales of which grew nearly 40 percent compared with the same quarter a year ago. To meet the increasing demand for Dens products, we restarted our gypsum facility at Savannah, Ga., during the quarter exclusively to produce Dens panels."
