Resolute Forest Products Declared Muted Results in Q2

SEATTLE (Scrap Monster): Resolute Forest Products announced preliminary results for second quarter 2019.

For the quarter ended June 30, 2019, the company reported net income of $25 million or $0.27 per diluted share. This compares with $72 million or $0.77 per diluted share in the corresponding quarter in 2018. The sales reported notable decline by $221 million from the year-ago period to total $755 million. The net income, excluding special items, stood at $11 million or $0.12 per diluted share in Q2 2019.

The softening of global pulp market resulted in 18% fall in sales by market pulp segment, whose operating income dropped by $15 million from the prior quarter. The tissue segment operating loss narrowed to $4 million in the quarter, as sales rose 10%. The wood products segment reported an operating loss of $3 million, as compared with an operating income of $6 million in the previous quarter, mainly on account of pricing pressure. The newsprint segment’s operating income declined by $11 million to total $17 million during the quarter. The operating income by specialty papers segment remained more or less flat at $15 million.

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Yves Laflamme, president and chief executive officer noted that the company’s pulp and paper businesses continued to generate strong margins and attractive cash flows, despite pricing challenges. The tissue segment generated marginally positive EBITDA, taking advantage of higher pricing and improved productivity, he added.

Resolute Forest Products maintained cautious outlook for lumber in the short term, but is optimistic with the underlying market fundamentals.