West Fraser Timber Co. Ltd. reported today that its operating earnings plummeted 88% in the third quarter from the year-ago period even though sales were virtually the same. Results in comparison with 2011's second quarter showed much less variation.
Earnings from continuing operations for the Vancouver, British Columbia-based timber company shrank to just C$6 million (US$6.1 million) in the third quarter from C$49 million (US$47.1 million) in the July-September 2010 period, the company announced. Those conversions to U.S. dollars are based on West Fraser's estimate that its dollar was worth US$1.02 in the this year's third quarter vs. 96.2 U.S. cents last year.
Operating earnings shrank about two-thirds to C$23 million (US$23.5 million) from C$66 million (US$63.5 million), while sales were virtually unchanged at C$705 million (US$719.1 million) this year and C$707 million (US$680.1 million) in 2010.
The changes weren't as dramatic when compared with 2011's second quarter, when the loonie was worth $1.033. For April through June of this year, earnings from continuing operations totaled C$11 million (US$11.4 million), operating earnings hit C$22 million (US$22.7 million), and sales climbed to C$720 million (US$743.8 million).
West Fraser's lumber segment generated an operating loss of C$15 million (US$15.3 million) while the panels segment had a C$2 million (US$2 million) operating loss. The company noted that its results reflect continued weakness in the U.S. new-home market, slightly lower--though still comparatively robust--lumber shipments to Asia , and increased in prices for plywood and MDF.
The company's production of SPF (spruce-pine-fir) lumber climbed 6.4% from the previous year to reach 880 million board feet, while its output of Southern yellow pine grew 4.8% to 391 million board feet. Production of plywood, MDF, and LVLs all dropped.